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Providers set to continue with £5m regulation subsidy

A deal has been reached in the long-running negotiations between Aifa and the ABI, which will see providers contributing £4m to £5m a year to help subsidise IFAs&#39 regulatory costs, Money Marketing understands.

Negotiations have been going on since before N2, with Aifa eager to continue the subsidy of between £4m and £6m that IFAs received under the old PIA regime.

Neither organisation will confirm whether a deal has been reached, saying the final details are still being sorted and that an announcement is expected over coming weeks, but it is expected that the subsidy will continue much as it currently exists.

At the end of January, the FSA released consultation paper 125, Fees 2002/2003, which proposed that the fees paid by IFAs for the financial year which began on April 6 will be £29.6m.

This figure will not be confirmed until the regulator&#39s annual board meeting in May but it is likely to be approved at the meeting.

In the last year of the PIA, IFAs paid £28.8m towards regulation.

The amount that each firm pays depends on the number of registered individuals, with a complicated formula applied which means that the more RIs a firm has, the less it pays per adviser.

An ABI spokeswoman says: “People may have been talking a little prematurely because the details have yet to be finalised.”

Wentworth Rose managing director Philip Rose says: “I warmly welcome the assistance from the companies.”

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