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IFAs welcome cut in FSA fees

Advisers have welcomed news that the FSA has reduced fees for IFAs and mortgage brokers by £11.7m compared with initial proposals in February.

The regulator this week revealed finalised fee rates and Financial Ombudsman Service levies for 2009/10. At 4.8 per cent, the increase in fees for IFAs is not as steep as the FSA proposed in February, when it said they were likely to rise by 15 per cent. Mortgage brokers will see a 2.7 per cent rise compared with February’s proposed 21.2 per cent.

The news follows intensive lobbying by Aifa.

However, the FSA is raising 35.8 per cent more in fees than it did last year with banks and other deposit-takers seeing total fees hiked by 109.4 per cent from last year compared with the 94.9 per cent increase proposed in February. The news comes amid revelations that FSA staff bonuses were up by 40 per cent to nearly £20m from last year.

Minimum FSA fees will be frozen at 2008/09 levels and the FSA says once the financial penalty rebate is applied, approximately 10,000 of the smallest firms will see a fee reduction compared with the previous year.

Aifa director general Chris Cummings says: “Following our highly publicised fees campaign, I am delighted the FSA has revised the fees paid by IFAs and mortgage advisers.

“This is an appropriate and welcome measure in difficult economic times.”

Positive Solutions chief executive officer Jim Reeve says: “It is a great result. Hundreds of our IFAs have written to the FSA and their MPs on this issue. It shows the regulator is willing to listen.”

Whitechurch Network managing director Ian McIver says it is good news for IFAs but adds: “It is galling that, looking at the overall bill, the FSA is asking for 35 per cent more in fees when it has paid out £20m in bonuses.”

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