View more on these topics

Apfa: FCA should compensate advisers after £118m fee overcharging

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.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. The history of regulatory intervention highlights that in every instance where a firm has applied incorrect charges to its customer bank it has been compelled/persuaded to make compensation payments an action often accompanied by some form of enforcement.

    If the FCA fails to compensate advisers then it is yet again guilty of operating dual standards as well as confirming the old adage about the higher the monkey climbs the tree.

  2. It’s about trust, ethics and fair play.

    The FCA have the opportunity to demonstrate all three.

    Whatever they do they will be leading by example…

  3. Not only should we (past and present) be fully compensated, but it would be wise to take this money directly from the bonuses of the FCA staff themselves; otherwise we will end up just paying ourselves back.

  4. Scenario 1. The FCA keeps the money and have a party inviting former employees such as Mr Sants who can show us all his gong.
    Scenario 2. The FCA repays the money split equally between those that are left in the financial services industry, who were overcharged.
    Scenario 3. The don’t do a thing and not one of us can do anything about it. (Their preferred option)

    Those that worked for the Prudential back in the 80’s and 90’s will remember Scenario 3 and we couldn’t do anything about that either.

  5. Surely any discount offered would have to be funded by the fee block it is offered to? As the regulator is funded by industry this makes no sense?

    “…We will offer you a discount next year but we will need to increase charges this year to cover the cost of the discount…”

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com