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 yesterday, 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 also announced it is to carry out a review into the way its annual budget is allocated 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: “The FCA has inherited this fees system from the FSA, and it is right the new regulator should take a look at this.”
He notes that when the regulatory bill for financial advisers is added to that faced by advisers who handle client money, mortgage brokers and general insurance brokers, advisers are collectively responsible for 30 per cent of the FCA’s £432.1m budget for 2013/14. Firms will pay £391.5m of the total budget, following £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, particularly in light of the drop of advisers following the introduction of the RDR.”