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Networks adding up FSAVC bills for members

The IFA sector is bracing itself this week for a multi-million-pound hit from the costs of the FSAVC review as networks reveal the costs that members are likely to face.

The biggest IFA network Misys says it is preparing to shoulder a £3.3m bill for the review and plans to pass on a further £3.3m to its member firms. Each firm can expect an average cost of £2,200.

Network M&E says it expects the review to cost at least £1m but says it will absorb up to £700,000 of this out of its profits.

M&E this week issued its 1,200 members with a menu of charges for services relating to the review, including establishing the initial population, which all advisers are required to do by the regulator.

DBS says it is as yet undecided on whether the costs will be absorbed by its members or by the network and is not willing to disclose how much these costs will be.

M&E managing director Simon Hudson says: “We estimate the costs of the review will be £1m. We plan only to pass £300,000 on to members. We are not unfeeling about these costs but members have to understand that no networks were prepared for the costs of this review.”

Misys IFA Services head of marketing Andrew Bedford says: “With the downward pressure on commission, we felt commercially our members could not afford to pay the costs and we said we would take a 50 per cent hit.

“It is a big hit but the review needs to be done right and done right first time.”

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