Deputy director general Fay Goddard says overall the FSA’s budget brings good news for the vast majority of Aifa members.
Goddard says despite increases in FSA fees, the remodeling of the funding scheme for the FSCS has helped to bring the regulatory cost for advisers down.
She says: “Aifa has worked tirelessly to secure a fairer distribution of regulatory costs and the new Financial Services Compensation Scheme funding arrangements have helped deliver this.”
She says: “Last year firms in fee-block A13, where most IFAs fall, paid around £1,290 per adviser to meet FSCS costs. Under the new structure, according to the FSA website the levy for 2008/09 for a sole trader just undertaking life and pensions business could fall to £218. The FSCS bill for a firm of 8 advisers conducting just Life and Pensions drops from £10,180 to an estimated £1,650.”
Goddard adds that while FOS fees have increased slightly from last year, case volumes are expected to fall.
She says: “It is a mixed picture for advisers with regard to the FOS fees.
“The good news is that the number of cases is expected to continue to fall to an estimated 84,000 -10,000 less than last year’s forecast – but this does impact on the case fee. Fewer cases mean less money is raised through case fees, which pushes up the general levy. To keep a proportionate balance between case fees and levy, FOS is proposing to increase the case fee from £400 to £450 but the good news is that firms will receive three free cases, rather than two.”