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Apfa: Advisers hit with unfair FCA costs burden

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Chris-Hannant-2012-700x450.jpg
Apfa policy director Chris Hannant

Apfa has backed the Financial Conduct Authority’s decision to review the way it calculates firms’ regulatory fees, saying advisers are facing a disproportionate level of costs.

The FCA regulatory fees and levies paper, published last week, revealed advisers in the A13 fee block, which covers most financial advisers, face a 15 per cent hike in regulatory fees for 2013/14 from £32.8m to £37.9m.

The regulator is to carry out a review into the way its annual budget is allocated to firms, which could see the current fee block model scrapped with fees allocated on an income or risk basis instead.

Apfa policy director Chris Hannant says it is right for the new regulator to look at the way fees are allocated.

He notes the combined bill for financial advisers, those who handle client money, mortgage brokers and GI insurers accounts for 30 per cent of the FCA’s £432.1m budget for 2013/14, less £40.6m in retained FSA fines.

Hannant says: “When you look at the split, advisers as a whole pick up 30 per cent of the bill, while well-capitalised insurers pick up just 13 per cent. It strikes me that the balance is not there, and it is not right that advisers face such disproportionate costs.”

Capital Asset Management chief executive Alan Smith says: “Advisers have felt strongly for some time that their cost burden is significantly disproportionate. A radical overhaul of fees is well overdue.”

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