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‘Out of control’: Adviser bills double as regulatory costs bite


Some advice firms have seen their regulatory bills more than double as the cost of Financial Services Compensation Scheme levies is brought to bear.

Firms have started receiving their regulatory bills for the next financial year over the last week.

Compliance firm Threesixty estimates that 80 per cent of the costs are generated by the FSCS, with total levies for life and pension advisers going from £57m to £100m.

Managing director Phil Young says: “All of these firms show a reasonable increase and the lowest we have seen in detail was an increase from £50,000 to £76,000.

“These things have been getting out of control.”

Informed Choice managing director Martin Bamford has yet to receive their full regulatory bill, but adds advisers are struggling to understand paying more for both better regulation and more firms in default.

He says: “We don’t seem to be getting anything in return for it.

“More effective regulation should mean fewer failures, and fewer fines, but we are spending more on regulation and more on compensation so something is going wrong somewhere.”

Rowley Turton IFA Scott Gallacher agrees. He says: “It’s not going up by small amounts and I don’t see how you can have a principle of ever rising regulatory costs.”

Gallacher adds the costs have led some customers to question the value of the advice service, because they are unaware of the proportion of fees going to the FCA.

He says:“Firms should be looking at providing bills to customers that break down the regulator costs. Maybe that would lead to regulatory costs being more appropriate.”

Alpha Investments and Financial Planning director Alan Solomons expects his costs to rise by double or more.

He says: “I thought we would be over the worst by now. I didn’t expect it to be going down, but I expected it to be going about the same as last year.

“What the FCA should be doing it looking at products before they’re launched, then we wouldn’t have the cost of all these failures to bear as well.”


Firm 1

2014/15                  £44,000

2015/16                  £89,000

Firm 2

2014/15                   £50,000

2015/16                   £76,000

Firm 3

2014/15                  £37,000

2015/16                 £63,000

Firm 4

2014/15                  £50, 000

2015/16                  £116,000

Firm 5

2014/15                  £37, 000

2015/16                  £72, 000

Source: Sample from Threesixty


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There are 8 comments at the moment, we would love to hear your opinion too.

  1. Julian Stevens 6th July 2015 at 6:36 pm

    Regulator fails. Bills for advisory firms rocket. FCA says Can’t be helped, not our fault. Salaries, bonuses and waste continue to go up. Advice becomes ever more expensive. The number of advisory firms throwing in the towel continues to rise. Industry finds it ever harder to attract new blood. FCA continues to ignore the Statutory Code of Practice for Regulators. APFA writes an open letter to the Treasury. Nothing happens.

  2. I deauthorised in 2012. In retrospect I believe it was a wise move

  3. If I’d elected to “invest” in acquiring the mandated re-qualifications in order to continue to provide ‘Retail Investment’ servies to our small band of ‘invested’ clients, I’d have to de-authorsie now as well due to these rising costs leading to the service being provided degrading to almost ‘pro bono’ in profitability terms. What a complete waste of all the time & money it would have been in ‘re-qualifying’. The choice was hard but simple, so we relinquished our permissions at the end of 2012. Who lost/loses out yet again? The clients first, followed by the firms. How is this, can this be acceptable?????

  4. Regulation is bust!

    The less is more principle works here. Proportionate and balanced not politicing or assuaging the liberal consumer lobbyists.

    Parliament is the only hope for this industry because the flow of regulatory effluent and the cost of clearing it will fall on us and our clients.

    • Sorry Peter I have to disagree on two points -: regulation is not bust (I do know what mean though) its booming !!
      And its not even worth looking to parliament, how many letters / e-mails have been sent to our MP’s, the TSC, the PM himself only to be completely dismissed, the truth be known the treasury and government do NOT want people to save, spend spend spend and spend some more and unfortunately its all going to be at the cost of the financial services industry, which is tied up in a nice little bow because all the costs and liabilities fall on our door mats.

      So you see, we are nothing, but enslaved to a master, who is to politically valuable and remains a very important source of extra revenue, you and me are microscopic cogs in a catastrophic plan designed and directed by a greedy right hand !

  5. The regulator acts and behaves worse than a 3rd world dictatorship

    None for you and all the more for me !

  6. The FCA will have to regulate guidance soon to generate revenue as they’ll have driven all the advisers out of the regulated environment! Extremely short sighted!

  7. I started with Sesame as a Mortgage and protection adviser on August 2009 with Fair Deal Mortgages. My fee to Sesame was £55.00 per month with FCA levy every 6 months £210.. This has now increased to £210.00 per month and £633.00 FCA levy. I only now concentrate on Protection business with no extra permissions. Hard business to be in now and I have been in the business over 40 years.

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