Intermediaries' body decries serious disconnect with approach to fees
The Association of Mortgage Intermediaries (AMI) said it is “infuriated by the arrogance” of the new fees consultation of the Financial Conduct Authority (FCA).
AMI suggested that the new FCA regime’s second fees consultation failed to gain ground from last year’s ‘debacle’ and that the regulator had become more opaque than transparent.
It also noted that while the FCA had delivered a good three-year plan and business plan, there was still a serious disconnect with the approach to fees.
AMI criticised the repeat of the five-week consultation period, which it said remains the shortest in memory, and the 14.8% increase in the appointed representative levy on networks that it says is hidden in the rules.
It also slammed significant increases to the minimum fee phased over two years, and the FCA’s assumption that firms can just pay for its national insurance increases without consideration of prioritisation that AMI firms have to go through.
Lastly, the mortgage intermediaries’ body disagreed with the decision to charge mortgage brokers for the new work on cryptocurrency, saying they are “obliquely captured under some Money Laundering requirements.”
Robert Sinclair, chief executive at AMI, said that the impossibility for anyone to hold the FCA to account was becoming damaging to the industry.
“Surcharging networks a further 14.8% on Appointed Representatives, for issues that exist in other markets, continues to cause us significant concern,” Sinclair stressed. “The assumption that mortgage broker customers can find the money to pay for the process to review and authorise cryptocurrency firms displays a total lack of appreciation of the thin margins that most brokers operate under.”
The FCA senior team said it hopes to have the time to engage more with the industry later this year than it has been able to do during the COVID-19 crisis.
“It is to be hoped that there is enough of an industry left by then, as the increasing regulatory cost burden makes this a less attractive place to be. It is death by a thousand cuts, with increasing FOS fees, FSCS costs, Consumer Duty and the raw cost of the FCA activity and fees. Good firms cannot just keep having an escalating bill,” Sinclair said.
