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Apfa: Advisers face 30% FCA fee hike

Chris Hannant 480
Apfa policy director Chris Hannant

Apfa estimates advisers’ regulatory costs could jump by up to 30 per cent as part of the Financial Conduct Authority’s £432m budget for 2013/14.

The FCA published its business plan yesterday which sets the regulator’s annual budget for next year at £432.1m. The figure is a 23 per cent reduction from the FSA’s £559.8m budget in 2012/13.

Out of the total £432.1m FCA budget, the industry will pay £391.5m, following £40.6m in retained FSA fines to reduce the amount paid by the industry in fees.The business plan suggests around 30 per cent will be paid for by investment advisers, mortgage advisers and general insurance brokers, which would amount to £118.6m based on the £391.5m figure.

Apfa policy director Chris Hannant says: “The precise details of the FCA’s budget for the next year are not yet clear. However, our initial calculations suggest there will be a big hike in fees for all types of intermediaries, potentially up to a 30 per cent rise.

“While we do not know the breakdown, this could come as a further blow to advisers already dealing with the impact of the wider economic environment and the costs of RDR. It is particularly disappointing that firms are still unsure exactly what their total bill will be for next year.”

Apfa has calculated the increase based on the fees paid by advisers last year less the discount applied from FSA fines.

The FCA will publish a paper next month setting out the fees firms will pay. Last year advisers in the A13 fee-block, covering advisers that do not hold client money, paid £32.8m towards the FSA’s annual budget.

Combined with the £22.3m paid for by advisers that hold client money, the £10.5m paid by home finance providers and mortgage advisers, and the £21.4m by general insurance brokers, advisers last year paid a total of £87m towards the FSA’s annual budget. The figure was reduced from a total of £113m before the discount for FSA fines was applied.

Many firms were shielded from higher regulatory costs last year as they fell into the A0 fee block, which means they only pay the minimum fee of £1,000. Overall 42 per cent of firms in the A fee-blocks only pay the minimum fee.


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There are 8 comments at the moment, we would love to hear your opinion too.

  1. Here we go again- let’s punish to IFAs who have not been hit hard enough with everything else to driver them out of business so that BancAssurance, if any left, will be able to take over as they haven’t made a big enough nuts of things have they? RDR- fair or puniative regulation to stop the good advice from the majority of IFAs- very poor yet again

  2. IS there no end? 26th March 2013 at 10:25 am

    Lets face it, no one listens, no one cares, the people making decisions have no clue, no practical gifts and no breadth of vision – but we have no collective voice, we are sitting ducks and will clearly continue to be smashed with the mallet relentlessly.
    Anyone fancy sharing a row boat to Cyprus?

  3. At the risk of sounding extremely stupid, If FCA budget to be 85% of the FSA one and advisers to have no role in PRA – How in th ename of Zeus’s butt can AIFA figure out a 30% increase in fees?

  4. Ooops, sorry meant APFA – SIlly me

  5. So the FCAs budget for next year is not clear, how do these people get their jobs, I would have thought that when setting up a new regulator a full cashflow forecast and fee levels would have had to be put together BEFORE it comes into force.

    Clearly there is no business planning going on inside this unaccountable, inadequate and poorly performing regulator now, never mind the new one coming into being shortly.


  6. Peter Heffernan 26th March 2013 at 12:18 pm

    So this is on top of the 26% increase I saw in fees this year, which made, in total a 78% increase over the past 5 years to August 2012??????? Still Hector Pants must of had a great time last summer on the £250,000 of our money.

  7. Ok, did anyone read my comments here last week when this first hit the press. IFA’s in general are weak, quite lazy and are an easy target because we simply roll over and accept what is dished out. If we all said no and refused to pay our fes what would the regulator actually do ? As with RDR, AIFA as was will do nothing, Chris Hannant has simply told us whats going to happen not that he is going to fight this or do anything else! What are members paying fees for ? If you disagree with the fee rise which is frankly criminal lets get together and fight it or shut up moaning. Would any other industry stand for it – NO- So why do we?. I await your calls!!!

  8. If APFA were to back a refusal to pay more fees than last year, I would back it and rejoin APFA.
    Refusinbg to pay completely is one step too far I am afraid.
    A refusal to pay the FSCS and Money advice element to the FCA at all I would also back as the FCA should not be acting as the debt collector for the FCA and then claiming they have no influences, they should have to invoice seperatly if they are as they say seperate entities.

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