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IFAs can pay in instalments but FSA sets interest at 9%

IFAs are “disgusted” at being charged interest at 9.1 per cent to pay their regulatory fees by instalments.

The FSA has signed a contract for the instalment option with Premium Credit, part of the MBNA group, which it hopes will improve IFAs’ cashflow.

IFAs will be able to pay FSA, Financial Services Compensation Scheme and Financial Ombudsman Service charges on a monthly payment plan over 10 months at a rate of 9.1 per cent. There will also be the option to pay over six or 12 months but interest rates will differ.

Direction principal Darren Baker says: “I am a little disgusted. I could get a personal loan cheaper. The instalment option will be attractive to IFAs who are a bit strapped and are not able to put a lump sum aside but I think the FSA is abusing its position.”

FSA director of contact, revenue and information management Graeme Ashley-Fenn says although the contract is in place, he is hoping that other providers will come forward offering better deals. He says: “It is important for firms to manage their cashflow and we are delighted to have come up with this solution.”


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