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Brokers facing £1,400 fees for loan regulation

FSA proposals for regulating mortgage and general advice could hit brokers with a bill for up to £1,400 in application fees, according to a draft consultation seen by Money Marketing.

The LIA says the move could see up to 30 per cent of brokers decide not to become authorised.

The paper, which outlines what it will cost firms to seek authorisation once mortgages become regulated in October 2004 and general insurance in January 2005, says advisers could be charged up to £1,400 if they apply after April 1, 2004.

Those firms applying electronically before April 1, 2004 would only face fees of between £500 and £700 and those before that date on paper between £600 and £800.

Electronic applications after that date would be levied with a fee of between £1,000 and £1,200 but paper applications after April 1 next year would cost between £1,200 and £1,400. IFA firms who are already authorised for investment business would pay half these amounts.

LIA head of public affairs John Ellis says these amounts are excessive and could dissuade up to 30 per cent of brokers from seeking authorisation. Others say those IFAs who only do a small amount of mortgage business could decide not to bother doing any business in the new regime.

Ellis says: “I think the amounts we are talking about are excessive and could dissuade up to 30 per cent of brokers from seeking to become authorised.”

FSA spokeswoman Kate Bristowe says: “I am not going to comment on something we have not consulted on yet. We have not even published the consultation paper yet.”

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