Aifa has warned that the FSA’s move to base adviser fees on income rather than the number of advisers risks punishing successful and profitable businesses.
The FSA published a consultation paper this morning on regulatory fees and levies for 2012/13. It proposed changing the fee tariff for certain fee blocks, including the A13 block which covers many IFAs, from the number of authorised persons per firm to the level of income generated by the firm.
Aifa director general Stephen Gay (pictured) says: “Income based fees can run the risk of decreasing efficiency and productivity in the profession, punishing those firms that have built successful, profitable businesses with higher than average ratios of income per adviser.
“Many of these firms have based their success on greater investment in compliance and research, meaning they also present lower regulatory risk.”
Gay wants to see the FSA’s fee regime based on the risk presented by each firm instead.
The consultation on the proposals closes on February 6.