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Sole traders to pay less after N2, claims FSA

The FSA claims most of the UK&#39s 1,500 sole trader IFAs will pay less in fees to the regulator after N2 under its proposed fee-raising arrangements.

It says one-person firms currently pay between £1,110 and £1,670 to the PIA depending on the type of business but under the new structure the average fee will be £1,200.

It says those firms facing

a 71 per cent increase will

pay less than £1,000.

But the FSA says if negotiations between the ABI on

continuing the cross-subsidy payment from providers to IFAs do not succeed, networks and bigger IFAs face an inc-reased fee.

The FSA&#39s revised budget for its regulatory work for 2001/02 is £166.9m, up from its original estimate of £164m, to cover the new responsibilities it is taking on from the start of N2 on December 1.

These new responsibilities include the direct regulation of lawyers and accountants, educating consumers, tackling market abuse and reducing financial crime.

Under the new risk-based approach to regulation, the

FSA says insurance firms face the biggest increase in fees because of recent debacles such as Equitable Life and the collapse of Independent Insurance putting consumers in danger.

To cushion the impact of higher fees, the FSA is prop-

osing to phase in the changes over a three-year period.

Spokesman Robin Gordon-Walker says: “We are awaiting the outcome on the talks bet-ween the ABI and Aifa. If they do not succeed, it is the ind-ustry that has decided that it did not want the cross-subsidy to happen.”

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