Pink is set to increase its fees for brokers who are writing “little or no business”.
The LSL Property Services-owned network says it cannot give the exact number affected by the move at this time but says it is a “handful” and less than 10 per cent of its 379 registered individuals.
Moreover, the network says it cannot say by how much fees will increase as each case has been dealt with individually depending on the level of business written. It would not specify what it regards as a “little” amount of business nor when the fee increase would take place.
Pink director Mark Graves says the move was taken to ensure intermediaries writing good levels of business are not subsidising those who do not.
He says: “Pink has not increased its fees. It does, however, review its costs in July every year. In analysing its business this year, Pink has identified that there are a minority of individuals who are writing little or no business and are not working full time. We do not think it’s fair that the more successful advisers should be subsiding those who are writing very low amounts. Therefore, we are increasing the charges for these individuals to ensure that they contribute their fair share to the running costs of the business.”
Graves adds that the network is not trying to force these advisers out. He says: “We are still trying to accommodate the people in the network who are not writing business full time but this clearly comes at a cost. The majority of Pink members will not be affected by this rise and will see this as a positive move.”
Pink’s action comes three months after the FCA announced that brokers’ regulatory fees would rise by 8.5 per cent this financial year.
In a paper published in March, the regulator said the fee block A18, in which brokers fall, will pay £17m in regulatory fees this financial year, up from £15.2m the previous year. Moreover, the minimum fee will be set at £17 per £1,000 revenue, down from £17.53. However, as mortgage firms are set to see revenue increase by a predicted average of 20 per cent this year, they will pay more overall.
Brokers will also be charged a separate fee if they advise on consumer buy-to-let, which will become regulated as part of the FCA’s implementation of the EU’s Mortgage Credit Directive. The MCD comes into effect in March 2016.
Firms with existing Part 4A or interim credit permissions will have to pay a registration fee of £100 to be authorised to give consumer buy-to-let advice, while those without this will pay £500. On top of this, periodic fees are expected to be £250 for brokers.