View more on these topics

Outcry as FSA tells IFA its fees are too high

The FSA has told a central London-based IFA that its £150 an hour fees are too expensive and it must lower them.

The move has left IFAs aghast at what they see as blatant market intervention and has sparked fears that the regulator may be determined to push down IFAs&#39 tariffs despite clients&#39 willingness to pay what is perceived to be the market rate.

Money Marketing understands that, following a recent FSA supervisory visit, a fee-based advice company operating in central London was told its hourly fees are too high.

In defending itself, the regulator cited a conduct of business section in the FSA handbook stating a firm must ensure its charges to a private customer made in connection with the conduct of designated investment business are not excessive.

The firm in question did not want to identify itself as it is appealing against the FSA&#39s action.

Fee-based IFAs in London say that far from being excessive, £150 is the starting point for their rates, ranging up to an initial fee of £10,000 for complex cases.

Pensions & Investment principal Phil Moore says: “It would appear the FSA wants to move towards operating a cartel in telling us what we can charge. It is extremely interventionist and I am totally against it.”

Institute of Financial Planning chief executive Nick Cann says: “A move to cap charges for fee-based advisers would completely disenfranchise the top and bottom ends of the market.”

FSA spokesman Robin Gordon Walker says: “It is no secret that this rule exists, requiring companies to ensure that charges are not excessive. It is in the handbook and obviously, by definition, it is something that companies should follow.”

Recommended

Tough line on advertisers

If it sounds too good to be true, then it probably is. How many of us have glimpsed an advert and been lured in by something that looks like an amazing deal, only to find that, on closer inspection, there are hidden features or conditions that mean it is not nearly as attractive as it […]

Wealth Management buys Fairs

Software provider Wealth Management Software has announced it is acquiring rival provider Fairs for £2m, half to be paid upfront with the rest coming upon completion of the deal. Fairs has a long-standing presence in the IFA software market, having at one time being amongst the leading players, although it has failed to keep up […]

Peers call for FSA to be monitored

A report on the UK&#39s most powerful regulators concludes that the FSA needs to be monitored by the National Audit Office. The House of Lords&#39 select committee on the constitution recommends that the FSA&#39s cost-effectiveness and budgetary control are monitored by the NAO in a report entitled, The Regulatory State: Ensuring its Accountability. The report […]

Howard calls for Blair intervention on pensions compensation

Leader of the opposition Michael Howard has waded into the increasingly heated row over compensation for the 60,000 pensioners whose funds have been wound-up. He is calling for the Prime minister to make a personal intervention.

IHT: What were you doing in 2009?

One of the best sources of new business is your existing clients and, if they are estate planning clients, regular reviews are needed because people’s inheritance tax (IHT) problems tend to only get worse. Now, not a lot of things remain at the same rate as in 2009. If we turn the clock back, it […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment