Robert Sinclair, Director, AMI, commented: "FSA is estimating that its budget will need to increase by £117 million on last year's figures. This will impact greatly on our members. We have never had a regulator that has cost the industry almost half-a-billion pounds. The failings of the financial system rest with the Banks and the wholesale markets. It is they who should be forced to pay for their misadventures.
"While it is good news that FSA will freeze the fees at 2008/09 levels for the smallest firms and some will even see a reduction in their fees, larger firms will see considerable increases, some trebling. Small firms operating as Appointed Representatives will not benefit from the supposed fee-freeze - they will have to carry this additional burden. For example, medium sized firms with more than £5 million (AEI) will see overall regulatory fees rise by 114%. This will inevitably lead to increased costs for consumers and reduced access to advice at a time when it is needed most.
"Intermediaries do not pose a systemic risk and were not responsible for the current economic situation we find ourselves in. This is a clear case of good firms paying for the failure of the banks and their regulator.
"While we understand FSA's rationale to enhance its overall capacity to deal with volatility and to ‘minimise new initiatives,' this level of fee increase is fundamentally inappropriate. Every firm in the UK is facing great difficulty and trying to find ways of cutting costs. FSA is doing the opposite. At a time when the Government is trying to help small firms it is clear that this goes against that policy.
"AMI again calls for a National Audit Office (NAO) review of the FSA's expenditure, budgeting process, and proposed projects, to ensure their appropriateness.
"We are quite simply not prepared to accept this, and to paraphrase the words of FSA Chairman Adair Turner, ‘The intermediary community has paid too much for regulation for too long'."
