FCA chief executive Martin Wheatley has rejected calls to compensate advisers who have been overcharged on their fees due to an “anomaly” in the current system.
The FCA said in a consultation paper on regulatory fees and levies for 2014/15, published in October, that there is an “anomaly” in the current system and proposed merging the A13 and A12 blocks to correct it.
Earlier this month Apfa also called for the regulator to compensate firms that have been paying a disproportionate amount under the current fee system.
But at a press conference in London yesterday, Wheatley denied A13 advisers had been “overcharged”.
He said: “We work out our fee blocks every year, and the fact there may have been a mistake in one of the fees is quite different to saying there was an overpayment and a need for an adjustment the following year.
“So I do not think there should be any adjustment, but if there was we would end up with a ridiculous position where we have to charge the extra from a different fee block, which would get very messy.
“We have to collect our fees and we end up with zero at the end of the year, it is not as if we have a lot of reserve funds.”
The FCA said in its consultation paper that the “anomaly” in the way the A13 block interacts with A12 means that A13 advisers – those who do not hold client money – have been paying a higher fee per £1,000 of income than firms in A12, a separate fee block for advisers, dealers and brokers who hold client money.
This is despite the fact that firms which hold client money require greater regulatory scrutiny.
The regulator proposed merging the A12 and A13 fee blocks for 2014/15, meaning A13 firms would pay a lower fee per £1,000 of income. Firms which hold client money would pay an additional fee.