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TSC still has ‘concerns’ over FCA overcharging advice fee block

Treasury select committee chairman Andrew Tyrie says there are still  “concerns” about the FCA’s overcharging of the adviser fee block.

In December last year, the FCA merged the A13 fee block – which relates to advisers who do not hold client money – with the A12, a separate fee block for advisers, dealers and brokers who hold client money.

It meant A13 advisers were overcharged £118m over five years.

In February, Tyrie quizzed FCA chairman John Griffith-Jones about the overcharging and Griffith-Jones wrote to the TSC, with the letter published in August.

In the letter, Griffith-Jones says: “I have looked into the matter and am content that no firms were overcharged. I am also satisfied that by consulting on an annual basis, our processes for calculating fees are transparent.

“While creating a new fee block does lead to winners and losers in the short-term, I do not believe this means that some firms have been historically ‘overcharged’ any more than others have been undercharged.”

Speaking to Money Marketing, Tyrie says: “In correspondence, the FCA flatly rejected accusations of ‘overcharging’ investment intermediaries. Nonetheless, there remain concerns that some firms may have paid more for less supervision than others with similar income levels.

“It is unclear, however, to what extent this is the case since income levels per firm in both blocks is unknown. The new fee block should operate in a more transparent way.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Dear Mr Tyrie
    I think Mr Griffiths Jones is the wrong person to speak to ! you only have to look at his history in accounting ! let us not forget he was chairman of KPMG and gave HBOS and Co op a clean bill of health !
    He is not worried about overcharge’s, if memory serves me correctly I think the KPMG bill to Co op was around the 7 million mark ?

  2. Whatever, a regulatory tax on firms of around £2,000 per adviser is much much too high.

    It’s just a shame that Mr Tyries party persisted with the wrongs done by Labour and made the shiny new regulator above Parliament. All he can do is moan and we know that the FCA will simply ignore him.

  3. SL — exactly. On just what basis does Mr Tyrie expect the FCA’s response this time round to be any different from what it was when he first put to Martin Wheatley that there is, at the very least, a strong moral argument for intermediaries to be reimbursed the £118m we were overcharged by the FCA in its previous guise? Wheatley just said No and that was that. What’s changed or likely to?

    It’s just moralistic posturing with nothing to back it up. The only strategy is a Judicial Review ~ so what if it costs £100,000? Set against what’s at stake, the percentage is minuscule. The FCA simply shouldn’t be allowed to get away with this.

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