It is not FSA policy to tell IFA firms how much they can charge in fees, according to FSA managing director David Kenmir, who says it is up to the market to determine what advisers can charge.
In response to reports that an FSA supervisory visit had resulted in an IFA being told that £150 an hour was excessive, Kenmir invited the adviser to come forward so he could apologise to him on behalf of the regulator. If the adviser fails to, Kenmir says it could prove to be a case of an urban myth.
He pointed to an example of a firm that received a note from the FSA about its tariffs following a court case where a client had complained about how much she had been charged.
The judge threw out the case, saying there was no basis for the claim but dismissed the outstanding fees to the IFA as being “unreasonably high”.
The FSA then sent a letter to the IFA informing him of the rule which allows it to intervene in cases of “excessive charges” but no further action was taken.
Kenmir says: “If we have made a mistake, I would be more than happy to apologise on behalf of the FSA but it is not FSA policy to impose limits on fees. We are not an economic regulator and do not propose a limit to what firms can charge.”