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FSA fees could rise to pay for bank risk staff

Advisers are worried that their fees may increase to fund an FSA recruitment drive in the wake of its poor handling of the Northern Rock crisis.

The FSA is to recruit up to 100 staff at a cost of £15m after its self-critical report highlighted the need for better quality supervisors and risk assessors.

It wants to attract high-calibre people with experience in financial markets and is boosting its budget for 2009/10 to pay salaries more comparable with City firms.

The FSA’s budget for 2008/09 is £323m and full details of how the regulator will fund the extra £15m will be outlined in its February 2009 business plan.

Adviser fees increased by up to 15 per cent this year to pay for increased small firm supervision and rose by up to 10 per cent the previous year.

A spokeswoman says: “It is not yet known whether this increase in the budget will be included within the standard rise in fees or if fees will need to increase more.”

Facts & Figures Financial Planners managing director Simon Webster says: “It would be a complete travesty if advisers’ fees increased as a result of this. The banking sector is causing the problems so the banking sector should have to pay.”

FSA’s Northern Rock review, p30,32,33

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