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FSA adviser fee burden rises 10 per cent

The FSA fee burden for advisers is to rise 10 per cent to pay for FSA staff retraining as a result of the move to principles, IT improvements and a greater investment in financial capability.
In the FSA’s 2007/2008 business plan, the fee rates affecting most advisers will rise by 10.3 per cent which reflects a 13.4 per cent increase in the fee block’s annual funding requirement, a 4.4 per cent increase in tariff data and a 8.6 per cent increase in its population compared to the previous year.
The burden on small firms is lessened by the fact they only pay a minimum fee, which will increase by 2.8 per cent. This will affect 40 per cent of advisers.
The overall FSA budget for ongoing regulatory activity will be £301.7m for the upcoming year, a rise of 10.1 per cent from the previous year.
The increase is due to greater funding for the FSA’s strategy on financial capability, from £9.7m to £17.1m, upfront investment of £11.3m on IT and £50m split over 10 years to help FSA staff adjust to the move to principles.
FSA chief executive John Tiner says he anticipates “more flexible and competitive levels of pay for our best people through reduced overall numbers of staff”.
He anticipates a headcount reduction by about 300 by the end of the decade, with increased bonuses for “exceptional performers”.
Tiner says: “I realise that this level of increase will concern many of our fee payers. However, the board is convinced that this is necessary to increase our effectiveness and deliver our statutory objective.”


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