It is at this time of year that the industry gets caught up in the annual budget-setting round and the number of free peanuts seems very small indeed.I was asked recently what have been the highlights for me since taking over as director general of Aifa a few months ago. Three stand out. The first was confirmation that, after a great deal of lobbying, the FSA and the Financial Services Compensation Scheme have agreed to review the funding block system. When the FSCS budget was set last year, for the first time, every IFA paid more towards the FSCS than the FSA and ombudsman combined. IFAs obviously pay a disproportionate cost. Work is now well advanced on this project and Aifa has been very active in presenting the case for members. It would be overly optimistic to assume that a new way of funding the FSCS can be delivered in time for next year’s budgets but I hope that a better system will be in place by the following year. My second high point was hearing the new Financial Ombudsman Service chairman confirm that he thinks the FOS’s funding structure could work better for IFAs. It is satisfying to know that this issue is now ready for debate. Indeed, when Sir Christopher Kelly spoke at Aifa’s annual dinner, he left the door open for us to provide proposals for better FOS funding arrangements. We are consulting with members on the options but we need your input so email or call me today. The current case fee system accounts for 70 per cent of the ombudsman’s costs while the levy makes up the rest. A move away from case fees would see the levy increase and, as every firm pays the levy, we must be careful on the proposals that we advance. My third highlight was hearing that around 4,000 firms have taken advantage of the FSA’s regulatory instalment scheme, which allows firms to spread the costs of their FSA, FOS and FSCS fees over several months. Aifa members benefit from better terms than those still outside the profession’s trade body. The scheme is an excellent example of an industry problem resolved by industry ideas, with the FSA working to enable the solution. With the FSA moving toward a principle-based regime, we could usefully look on this scheme as a good working model of future cooperation. My intention for the year ahead is to improve this scheme and deliver an even better deal for members. There is also the issue of total FSA costs. Encouraged by the practitioner panels, the FSA instigated a review of regulatory costs. This is under way but more IFA co-operation is needed. The more firms that participate, the more robust the results will be. Data is needed if we are to have a firm lobbying position from which we can negotiate a better deal. If you have not taken part in this work, please get in touch with me and we will discuss the best way for your firm to participate. May I wish all Aifa members a profitable 2006.