The FSA says it stands by its cost benefit analysis for the new professionalism requirements, which it estimates will cost advisers up to £225m by the end of 2012 and up to £12m in on-going annual costs from 2013.
In its final rules on professionalism, published today, the FSA says it has not underestimated the cost of the rules, as argued by some respondent to the consultation paper on professionalism, published in June.
In CP10/14, the FSA said costs to the regulator would be in the range of £4m to £5m initially and £3.5m annually. It estimated the total costs to advisers would be between £155m and £225m to meet the standards required by the end of 2012 and £3m to £4m annually after that.
The FSA says in addition, advisers will also incur the costs of independent verification of their compliance with professional standards.
It states: “As this market does not yet exist, we estimated costs to advisers at between £3m to £8m each year based on information from potential accredited bodies. This was likely to be an overestimate, as most advisers already belong to professional bodies and therefore may not incur additional costs.”
The FSA believes statements of professional standing, which independent and restricted advisers will be required to hold from 2013, can be delivered for between £60 to £175 per adviser.