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Regulator is accused of piling on the costs without benefits

Helm Godfrey says the FSA is providing no regulatory dividends or benefits to intermediaries despite big cost increases for most firms.

Managing director Bruce Wilson, whose firm has 33 advisers, says rising costs from the retail distribution review, capital adequacy and regulatory fees will severely damage firms.

He says: “The FSA is piling on cost after cost with no benefits for advisers. The more operating costs increase, the more IFA firms will go under and we’ll be left with an even greater burden.”

Wilson says while Helm Godfrey has strong cash reserves many more firms will be insolvent because of failings in the wider industry.

He says: “It’s outrageous. Where are the problems coming from? It doesn’t seem to be IFA firms, it is the banks. There’s no regulatory dividend for firms doing a good job.

True Potential senior partner Daniel Harrison says the regulatory fee hike will cause major problems for networks.

He says networks will have to absorb the higher costs of fees and increased capital adequacy requirements, or pass them onto members.

Harrison says: “Networks will have to pass these costs on, I can’t see how they can do otherwise. AR firms might find they are better off going direct, where they will have lower fees, lower capital adequacy and more flexibility in their business.”



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