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MPs push for two-year FCA fee freeze

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Three MPs have launched a motion in Parliament to call for a two-year freeze on FCA fee increases in a bid to improve access to advice.

In an early day motion filed this morning, Labour MP Alan Meale, Conservative MP Peter Bottomley and Northern Ireland’s SDLP MP Mark Durkan argue any further increases in regulatory costs would impair access to affordable advice in the aftermath of pension freedoms.

The MPs cited figures from Apfa showing advice firms spend 12 per cent of revenue on regulation.

The motion states: “[This house] calls on the Government to take steps towards demands for a real-term freeze in FCA regulatory fees for a minimum of two years to ensure investors are better able to acquire access to professional financial advice.”

Early day motions rarely reach debate in the House of Commons, but are used by MPs to raise attention to issues considered important.

It is possible for the most popular to be cited during parliamentary debates or questions.

The total levied by the FCA on advisers who do not hold client money increased by 10 per cent for 2015/16, climbing from £68m to £74.9m.

The minimum fee also climbed for the first time in four years, rising from £1,000 to £1,084.

An FCA spokeswoman says the regulator consults on its fees on an annual basis.

She says: “We are always conscious of the cost of regulation, which is why we work to ensure our requirements are proportionate.”

The motion comes a day after the Government launched a consultation paper on the availability of advice, with responses expected by 22 December.

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Comments

There are 11 comments at the moment, we would love to hear your opinion too.

  1. Of course they always consult but how much notice do they take of the comments?

  2. It’s not the FCA fee that undermines the cost of the advice process, its the nonsensical FSCS fee that does the real damage!

  3. We need a reduction, not just a freeze. Nice though a reduction in FCA costs would be, its the FSCS that really needs their attention.

  4. “We are always conscious of the cost of regulation, which is why we work to ensure our requirements are proportionate.” Requirements are proportionate in relation to what?
    Their wages? Their bonus? The amount of work they do? What they think they are worth?

  5. Ask for a full and proper breakdown of how all costs arise. Also need a better understanding of how the FSCS machine actually functions for the benefit of investors. Any outsider any business person any one you meet on the street would look at how we are “governed” and would simply shake their heads and choose another way of life.

  6. The regulatory fee (FCA) is actually not that unreasonable when you consider what is required. The FSCS and FOS are the areas that are causing the most harm and these need to be reviewed. I would also suggest that a two year fix is not a solution. The whole system of regulation and advice needs to be reviewed, as before long advice will be only available to the richest 20% of consumers.

  7. An 8% increase in the last 5 years in the FCA fee for small firms is not the issue. This makes a mockery of the true issue which is the FSCS levy. These MP’s have got it so wrong its embarrassing.

  8. The “fee” to a large extent is irrelevant, its value for my £

    I am not going to be one of the one’s who knows the cost of everything and the value of nothing.

    The first question to ask myself is, does the fee I pay to the FCA offer my clients (or any prospective client) first, and me second, good value ?

    I believe we do need a regulator, and I don’t mind sharing the cost, but not when this turns into a money wasting Leviathan, who offers no benefit or value to my clients of my business.

    The FCA maintain (as an instance) they need to offer “competitive” (over the top IMHO) salaries to attract the right people ? I would argue this only attracts the “wrong” people, greasy pole climbers, friend of friends, and people with a vested interests !

    So in short, I know what the FCA cost me and my clients, and yes the value I get is nothing !

    Win, win for them, lose, lose for me and my clients !!

  9. The primary cause of the recent massive increases to our levy bills is the government having decided to confiscate all fines, ostensibly to help injured servicemen and women but, in fact, hardly any of the money has been used for that purpose.

    MP’s should be haranguing the government to reverse this, though their chances of success are meagre because the government’s number one priority is to hew down the deficit by fair means or foul.

  10. The FCA will say “we will freeze our fees” but wont say that for the FSCS levy which is the big problem

  11. The archetypal Catch 22 situation – higher fees/levies means fewer advisers over time, which means higher fees/levies to keep the fat-cats in the manner. It’s a lose/lose situation, folks!

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