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FCA climbdown means lower reduction in adviser MAS bill

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The Financial Conduct Authority has watered down plans to reform how firms are levied to fund the Money Advice Service resulting in a less significant fall in advisers’ total MAS levies than was first expected.

In January the FSA consulted on allocating MAS “money advice” costs based on its data of how consumers use the service. The regulator initially suggested this could mean the total costs for firms in the A13 fee block, which covers many advisers, falling a massive 93 per cent from £4.6m to £300,000.

Mortgage lenders strongly opposed the plans, which would seen their MAS costs soar by 1309 per cent from £1.1m to £15.5m.

The FCA now says the change to allocation costs based on consumer usage was being introduced too quickly.

The MAS has since proposed a revised cost allocation basis for 2013/14 which will use a mix of the consumer usage method and the current allocation method to fee blocks, split 25:75.

Under the revised cost allocation method, advisers in the A13 fee block will see their fees go from £4.6m to £2.7m.

Mortgage lenders will still see a significant increase to their total MAS costs, but not as dramatic as first proposed, with their bill going from £1.1m to £4.3m.

The FCA says: “We believe the revised approach addresses the concerns raised by the industry that the pace of change to a consumer usage method was too quick and the transfer of burden too significant for the notice period given.

“It also allows more time for further consideration to be given by both the MAS and the industry on how a consumer usage method should operate and the extent to which there are alternatives or a mixture of more than one method.”

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. I am afraid the FCA has got this totally wrong. The massive reduction in IFA levy levels to the MAS was not happening too slowly, it was simply not a deep enough cut.

    MAS is I am afraid a complete and utter waste of our money. Clearly the FCA intends to continue where the FSA left off wasting other people’s money

  2. Why should we the IFA pay anything towards the MAS costs?. The FSA ,FCA have introduced a generic advice system where the customer goes on the MAS and receives advice from the system. There is no face to face advice.
    If there is any costs then it should come out of the bankers bonuses, that seems to e the flavour of the day!!

  3. H J you are wrong! A typical MAS adviser sees 30 customers per week. If they have an IFA, general advice is offered but it is suggested they confirm advice with their IFA. If they don’t have one it is suggested they enter their postcode into unbiased.com to find one and use the comparison tables on the website if appropriate.

  4. H J you are wrong! A typical MAS adviser sees 30 customers face to face per week. If they have an IFA, general advice is offered but it is suggested they confirm advice with their IFA. If they don’t have one it is suggested they enter their postcode into unbiased.com to find one and use the comparison tables on the website if appropriate.

  5. Has anyone in the IFA sector actually had a former MAS customer seek advice and has it resulted in any business ?

  6. I am fascinated. How many advisors see 30 people a week? What are the break down areas that enable MAS to ensure the most appropriate unqualified advisor is allocated to the consumer, such as debt, pension, investment, protection, unemployed etc? How is the non specific as its unqualified advice monitored? Under TCF how many of the peoole seen feel the meeting was of value or are no surveys done? Does Mas get a bulk discount on the huge postal bill this exercise would generate if done? How many people do MAS employ to collate this invaluable data? How much does each appointment cost to provide to the public? Has anyone asked if the typical 30 people would prefer to recieve the money rather than the limited advice?

  7. Ned

    Course not !!

    Smoke and mirrors !!

  8. Just another government quango.
    Useless utter useless and they want us to pay for this
    Anonymous– 9.21 you did not need to send you comments in twice – I understood the first one !!

  9. I think the MES is fine in principle, but MY clients don’t use it, so why should they pay for it? They do because I pass all regulatory and admin fees on to clients by dividing it by the number of my clients and they pat monthly by a REGULATORY PREMIUM FEE or RPF for short.

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