The industry will be hit by total costs of up to £82m as a result of the FCA’s final rules on the platform market.
The FCA’s policy statement on payments to platforms and cash rebates, published last week, 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 of implementing the ban on fund manager rebates and the ban on consumer cash rebates range from between £27.6m and £61.8m. Ongoing costs are estimated to be between £7.2m and £13.8m.
The latest analysis has pushed up one-off costs by £16m and ongoing costs by £4m compared with the FSA’s June estimate.
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 admits earlier estimates missed out two platforms, and so has revised its cost benefit analysis accordingly.
It 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.”
International Financial Data Services group executive David Moffat says: “The figures here do not take into account the huge costs platforms will incur through the loss of their legacy books.”