Apfa is calling on the FCA to pay compensation to advisers who have been overcharged on their fees.
In November Money Marketing revealed the FCA fee block containing most advisers, A13, has been overcharged by £118m over the past five years.
In a consultation paper on regulatory fees and levies for 2014/15, published in October, the FCA said there is an “anomaly” in the way the A13 block interacts with A12.
It means A13 advisers – those who do not hold client money – have been paying a higher fee per £1,000 of income than firms in A12, a separate fee block for advisers, dealers and brokers who hold client money. This is despite the fact that firms which hold client money require greater regulatory scrutiny.
The regulator proposed merging the A12 and A13 fee blocks for 2014/15, meaning A13 firms would pay a lower fee per £1,000 of income. Firms which hold client money would pay an additional fee.
In its response to the consultation paper, published today, Apfa welcomes the proposal to merge the fee blocks but wants the FCA to compensate firms which have been paying a disproportionate amount under the current system.
Apfa director general Chris Hannant says: “The new fee blocks proposed will better reflect the risks that firms pose, distinguishing between firms that hold assets for clients and those that do not.
“However, A13 firms paid a far greater share of the bill than they should have in 2013/14, overcharged by thousands of pounds per firm. We urge the FCA to make an adjustment to the fees for 2014/15 to correct this error.”
Apfa has also welcomed the revised charges for consumer credit licences proposed by the regulator in December, which would see the minimum charge for full authorisation fall from £1,000 to £600.
But Hannant says greater clarity is needed on whether advisers’ activities will be included in the legislation.
He says: “It is still unclear whether activities that advisers undertake will be caught by the legislation. More clarity is needed so that firms are not charged where consumer credit permissions are not required.”