The industry will be hit by total costs of up to £82m as a result of the Financial Conduct Authority’s final rules on the platform market.
The FCA’s policy statement on payments to platforms and cash rebates, published today, shows the industry faces one-off compliance costs of between £33m and £67.2m, and ongoing compliance costs of between £8.3m and £14.9m.
One-off costs to platforms of implementing the ban on fund manager rebates and the ban on consumer cash rebates range from between £27.6m and £61.8m, while ongoing costs are estimated to be between £7.2m and £13.8m.
The latest cost benefit analysis of the FCA’s platform rules have pushed up one-off costs by £16m and ongoing costs by £4m compared to the FSA’s previous cost estimates in June.
The regulator went back to platforms and one trade body after the industry raised concerns that the costs for execution-only stockbrokers had been underestimated and the costs for execution-only platforms had been overestimated.
The FCA says it did not receive further information that contradicted the initial estimates. But it admits the earlier estimates missed out two platforms, and so has revised its cost benefit analysis accordingly.
The FCA says: “We consider these revised costs are likely to be on the high side of estimates. Indeed, one of the largest existing non-advised platforms has informed us the compliance costs estimated for the typical non-advised platform were significantly higher than they anticipated for their circumstances.”