Appointed representatives of Sesame are set to see fixed membership charges rise by more than 50 per cent, with overall costs increasing on average by around 9 per cent per firm.
Currently, the fixed fee firm for an IFA is £29.20 a week, including VAT, but this will increase to £44.20 a week, including VAT, from August 1.
Mortgage and general insurance firms currently pay £19.21 a week, including VAT, but this will increase to £29.21 a week, including VAT.
A weekly fee is charged for each additional adviser within a firm. From August 1, IFA firms will see this rise from £28.58 a week to £43.58 a week per adviser, an increase of 52.4 per cent, while mortgage brokers will see the charge for each additional adviser increase from £19.21 a week to £29.21 a week.
Sesame is also increasing the percentage of turnover it retains from its IFA member firms.
IFA firms with an annual turnover of less than £100,000 will see their standard commission retention rate increase from 12.8 per cent to 13.05 per cent and for firms with a turnover between £100k and £250,000, the rate will increase from 10.3 per cent to 10.55 per cent.
Firms with a turnover between £250,000 and £500,000 will see their commission retention rate increase from 7.7 per cent to 7.95 per cent and firms with a turnover of £500,000 or more will see their commission retention rate increase from 6.2 per cent to 6.45 per cent.
The standard commission retention rate for mortgage firms will remain the same. Currently, these firms pay 9.7 per cent on the first £100,000 of turnover and 5.2 per cent on the turnover exceeding £100,000.
The minimum income a firm must generate for Sesame is set to rise from £4,843 a year to £5,495 a year, an increase of 13.5 per cent.
Sesame will also increase the amount it deducts from individual procuration fees from mortgage transactions from 1.5 basis points to 2 basis points from August 1.
Taking into account all of the changes to the charging structure, Sesame says the average member will see a 9 per cent increase in their fees compared to last year.
The network has roughly 1,200 appointed representatives.
Sesame managing director Nick Kelly says the decision was taken as a result of increased regulatory burdens from the retail distribution review and the mortgage market review.
He 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.
“And while we work very hard to improve the range of services and commercially leverage a business like Sesame has in the market, there comes a point when it is very clear what the costs are going to be to get through the RDR. You make the decision that you have to be transparent and have to act in a reasonable way.”