Shadow Treasury Chief Secretary Howard Flight is calling for the Treasury to provide accurate figures to reveal if IFA regulatory fees have gone down in line with fines paid by the sector.
Flight is looking across all sectors regulated by the FSA to see if areas hit by big fines see fees fall.
He has raised his queries with Treasury Financial Secretary Ruth Kelly in a written question but says he intends to pursue Kelly for a more satisfactory and detailed answer. Kelly has said that the FSA received £9,169,000 in financial penalties in the financial year 2002-03 and that it applied the amount to the fee-payers in six blocks.
But Flight wants a more detailed breakdown, which he believes would reveal that if the FSA did not receive supplementary income from fines, it would be exceeding its budget and raising charges.
A number of high-profile IFAs have been hit with heavy fines from the FSA during the last six months, including Chase de Vere Financial Solutions, which was fined £165,000 in December over structured product promotional material, and Deloitte & Touche Asset Manage-ment, which was fined a record £750,000 last week for compliance failures.
Flight says: “In essence, I have asked what the total sum of fines received is and if this has gone to reduce the fee.
“The bottom line is what they are effectively saying is that charges would be even higher without the income from fines. What I have not seen yet is whether the recent fines have been apportioned fairly and if the IFA fines have gone toward reducing the IFA charges.”
FSA spokesman Robin Gordon-Walker says: “All the money generated through fines goes back to the sector it has come from. The two fee blocks that apply to financial advisers are A12 and A13. The total income from fines for 2003-2004 is £5,600,000. Next year's fees will be reduced by this amount.”