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FCA confirms 4.7% increase in advisers’ regulatory fees

The FCA has confirmed a 4.7 per cent increase in regulatory fees for advisers.

In a policy statement on its bills for the year, the regulator has announced that FCA fees for the A.13 fee block, which includes financial advisers, will increase from £73.7m to £77.1m.

The move confirms plans set out by the regulator in an April consultation on funding for 2017/18.

However, there is good news for advisers too. In the consultation, the FCA said an estimated £4.4m would be delivered back to the A.13 fee block from penalties applied on poorly performing firms. £3.9m will now be returned, it has confirmed.

The FCA had planned to reduce the amount to fund the Money Advice Service by 10 per cent overall, with a six per cent fall for advisers, in light of the move towards a single financial guidance body comprising MAS, Pension Wise and The Pensions Advisory Service.

The regulator has now said that the total money advice levy would fall by nearly a third though, with the same amount taken off advisers’ bills.

The FCA proposed to cut the funding for Government-backed guidance service Pension Wise from 22.5m to £16.2m, reducing advisers’ share to 12 per cent, and has also followed through with these plans today.

The regulator acknowledged in its consultation that the fee block which includes advisers “will only benefit if, after using Pension Wise, consumers seek advice from regulated financial advisers”, and that other fee blocks “will more likely benefit as the monies released through greater pension flexibility, if used for investment, will be distributed among them.”

While the FCA noted that some had argued for advisers’ share of the Pension Wise bill should fall to 5 per cent, it said it the funding requirement for Pension Wise only represented 0.01 per cent of the income A.13 block firms reported, so it would not change its plans.

Advisers’ Pension Wise funding share had already fallen from 50 per cent to 12 per cent in 2015/16.

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Comments

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

  1. Nicholas Pleasure 3rd July 2017 at 10:47 am

    I would be fascinated to know what it actually costs to regulate the average IFA. My guess is virtually nothing as most of us never see nor hear from the FCA.

    The FCA regulates IFA’s through fear alone.

  2. My clients will be pleased….

    at yet another rise in my fees, to prop up this failure !
    If there is a need for political intervention its now, with all other public services resources being cut, this bunch of useless parasites continue to milk the clients of the financial services industry…..

  3. So as they have finally worked out that IFAs get no benefit from MAS or PensionWise, can we please have a rebate for the last 6 years?

  4. I thought the Regulator wasn’t keen on percentage charging, or as usual is it one rule for us and another for them?

    So the fees increase, but the industry is supposed to lower charges. Is this a secret ploy to make the industry insolvent?

  5. It would be interesting to see what would happen if the FCA were to word this as “investor fees will need to rise to cover increases in regulatory costs”. As well as being accurate it would also be clear, fair and not misleading…

  6. Neil Liversidge 3rd July 2017 at 12:37 pm

    I look forward to hearing Paul Lewis on Money Box telling us how we should not pay the FCA its percentage charge and how we should negotiate for a discount.

  7. Robert Milligan 3rd July 2017 at 12:47 pm

    MAS/Pension Wise/They are both politically motivated obfuscation, a complete waste of time, set up by those to whom funding has no accountability, Its these people who should be SACKED and pursued for the wasted costs

  8. There is a very big need for regulation, there is a requirement to police what is a very important area of the nations wealth.
    Cost will always be an issue, but I would suggest when the regulator is throwing stones in glass houses, it may wish to review its disclosure to the industry, make it clearer what we are actually paying for.
    Like the MP’s who could hold them to account, they tell the industry one thing, but then do the complete opposite themselves. MP’s talk of austerity, limit public sector pay rise to 1%, then give themselves 10%.
    The FSA is preaching lower charges to the industry, wants good results for the fees taken, yet is failing in many areas to deliver the correct outcomes.
    I suppose we should be grateful for the return of the fines to our sector, its an improvement, its a start.

  9. I can live with the FCA charge, it’s the FSCS levy that really hurts. However it will still be factored into client charges as there is nowhere else that it can now come from and clients will need to be made aware as to why… it’s called transparency!

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