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FSA’s fine fund brings lower fees for IFAs

FSA costs are to rise by 10 per cent from £454.7m to £500.5m but the total fees paid by advisers will reduce due to money collected through fines.

For 2011/12, the minimum fee paid by 43 per cent of the FSA’s authorised firms, including many IFAs, will fall by 9 per cent from £925 to £844.

The fee block for advisers not holding client money falls by 2 per cent from £40.6m to £39.7m, although the fee block for those handling client money rises by 88 per cent from £26.4m to £49.7m. The regulator says any increase in costs will be borne by larger firms, reflecting more intensive supervision of “highimpact firms”.

Cash from FSA enforcement fines means firms will pay 2 per cent less than last year in total. In the first nine months of 2010/11, the FSA collected £79.1m of fines compared with £33m in 2010.

For 2011/12, the FSA says the total net cash cost of the FSA, Financial Services Compensation Scheme, Financial Ombudsman Service and Consumer Financial Education Body falls by 18 per cent, from £1.323bn to £1.09bn mostly down to a reduction in FSCS costs.

CFEB funding rises by 32 per cent from £32.9m to £43.7m, with advisers paying £4.3m, up from £3.2m.

Aifa policy director Andrew Strange says: “We welcome a reduced fee for the majority of IFAs but we must ensure there are better checks and balances in place under the new regulatory structure to prevent ever spiralling costs.”

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Georgina Partridge

Georgina partridge

Plutus Wealth Management was only set up two years ago and one of the firm’s founders says the company is aiming to be the new face of IFAs with an emphasis on younger age groups and using social media to communicate with clients.

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