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Sesame AR fees rise due to regulator

Sesame appointed representatives will see their fixed membership charges rise by more than 50 per cent, with overall costs increasing on average by around 9 per cent.

From August 1, the fixed weekly fee for an IFA firm will increase from £29.20 to £44.20. Mortgage firms will see their fees increase from £19.21 to £29.21.

A weekly fee is charged for each additional adviser within a firm. The cost of each additional IFA will rise from £28.58 to £43.58 while the charge for each additional mortgage broker will increase from £19.21 to £29.21 a week.

Sesame is also increasing the percentage of turnover it retains from its IFA member firms by 25 basis points, ranging from 6.45 per cent for firms with an annual turnover of £500,000-plus to 13.05 per cent for firms with a turnover of less than £100,000.

Mortgage firms will see no change to their standard commission retention rate and will continue to pay 9.7 per cent on the first £100,000 of turnover and 5.2 per cent on turnover exceeding £100,000.

Sesame will also increase the amount it deducts from individual procuration fees for mortgage transactions from 1.5 basis points to two basis points.

The minimum income for Sesame firms must generate is set to rise from £4,843 a year to £5,495.

Taking into account all the changes, Sesame says the average appointed representative will see a 9 per cent increase in their fees year- on-year.

Managing director Nick Kelly says: “It has been five years since we increased the charges materially. During that time, we have not only got increased running costs but a regulator which has put more systems, controls and oversights in place.”

Sesame AR Lloyd Financial Management director Andrew Mallett says: “Sesame appointed representatives are likely to look seriously at becoming directly authorised due to the increase in fees.”



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