Advisers have hit out at the FCA’s increase in advisers’ regulatory bills, but have welcomed a move to reduce the amount they pay towards public guidance services.
While yesterday the FCA did increase its own fees for the A.13 fee block, which includes advisers, by 4.7 per cent this week, it did cut what advisers have to pay towards the Money Advice Service by a third from £2.7m to £1.9m after consultation.
Advisers will pay the same proportion of funding for Government-back guidance service Pension Wise, 12 per cent, but cuts to the service’s overall budget means their total levies will fall from £2.7m to £2.1m.
Those two public guidance bodies will be merged into a single organisation along with The Pensions Advisory Service after Autumn 2018.
Verve Investment Planning financial planner Steve Buttercase sounded an optimistic note on the future direction of adviser regulatory bills.
He says: “I think the FCA is handling it well for the constraints they find themselves in.
“I think it’s inevitable there’s going to be increases. The way the system is set up you’ve got cost pressures and you’ve still got the legacy of problems we have had in the industry. As we shake those out and we are seen more as a profession, a review of the way fees are structured has got to be on the agenda for the next five years.”
However, he expressed concerned that increased regulatory costs may harm smaller advisers and concentrate more power with larger ones.
He says: “Unfortunately the long term effect is to drive people into the arms of St James’ Place and bancassurance where they might not be best served….One man bands have only got so much latitude, bancassurance and some of the better run networks are able to absorb this more, but for how long?”
“Stones in glass houses”
Addidi managing partner Anna Sofat says that the regulator should look at ways it could use technology to reduce the cost of its own processes as it is encouraging firms to do through initiatives such as the regulatory sandbox and the Advice Unit.
Sofat says: “They talk about putting pressure on advisers’ fees, yet the cost of regulation is never brought into the equation. I think it’s time they started looking and how they are transparent to the public about the cost of regulation.”
“I hope this is not an increasing trend….I’ve been regulated for nearly 30 years. I’ve always been pro-regulation, get it sorted, do what needs to be done. But it’s being funded by the consumer. The value for money has got to come up here.”
Commenters on the Money Marketing website also agreed on the need for the FCA to control its costs.
Prism Independent Financial Advisers director Martin Evans wrote: “There is a very big need for regulation, there is a requirement to police what is a very important area of the nation’s wealth. Cost will always be an issue, but I would suggest when the regulator is throwing stones in glass houses. It may wish to review its disclosure to the industry, make it clearer what we are actually paying for.”