Final figures on Financial Conduct Authority fees show advisers will be hit with higher regulatory costs than expected which will be spread among a smaller number of adviser firms.
The FCA has published its policy statement this week on regulated fees and levies for 2013/14, following a consultation in April.
The policy statement reveals while the proportion of the £432.1m FCA budget that falls on advisers remains the same as the April consultation at £41.9m, advisers will receive a smaller fees discount as a result of retained FSA fines.
The A13 fee block, which covers most financial advisers, will receive a £3.8m fees discount, rather than the £4m first proposed.
The discount means advisers in the A13 fee block will have to pay a total of £38.1m in regulatory fees, up 16 per cent from £32.8m in 2012/13.
The cost burden will also be shared among fewer firms than first thought. In April, the FCA estimated the number of firms in the A13 fee block had fallen from 7,086 in 2012/13 to 7,000 for 2013/14.
It now estimates there are 6,788 firms in the A13 fee block for the next financial year.
Around 42 per cent of FCA firms will continue to pay the minimum fee of £1,000.
The FCA is carrying out a review of how firms’ regulatory fees are calculated and will set out its proposals in October or November.
Apfa policy director Chris Hannant says: “The FCA does not seem to recognise that after the RDR advisers pose less of a risk, and has failed to provide an explanation as to why 9 per cent of the budget is falling on advisers. It has just decided to plough on regardless. The current fees system is clearly broken.”
Plan Money director Peter Chadborn says: “It is a given that under the RDR fewer consumers will have access to affordable financial advice. The level regulatory fees have been set at for advisers just reinforces this and ramps up this effect even more.”