• £44.1m cost of statutory regulation
• Proposals for mortgage intermediaries' fees revealed
AMI has analysed the proposed costs of regulation and produced case studies to demonstrate to members what the fee levels mean for their firms.
Outlining his thoughts, Chris Cummings, Director of AMI, said: "The FSA has just published a consultation paper (CP 05/2), which sets out its view of what the regulatory fees should be. We estimate that the FSA is looking to raise £44.1m from mortgage and general insurance regulation. This is made up of £38.6m, cost of their work, plus a further £5.5m to recover their deficit. The implications for firms are set out in the case studies we are producing for members.
"AMI has been lobbying for several months on the regulatory costs and there are some clear signs, outlined below, that we've been heard."
The minimum fee for mortgage firms has been set at £750, lower than the £1,200 first muted
Where firms pay the minimum level of fee for mortgages, they will only pay 50% of the FSA's fees for offering general insurance advice ˆ so saving £250 (the minimum fee for GI is £500)
The Ombudsman will not charge a levy on the period from 31st October 2004, to the start of this financial year (the "stub period")
The Ombudsman will only charge intermediaries a £50 levy for the next financial year, offer two cases free, and only on completion of the third charge firms £360 (MCAS charges were £850 per case)
The FSA has said it will look to the industry to establish a "payment by instalments scheme".
Cummings continued: "Since inception, AMI has lobbied the FSA to set up a scheme where firms could pay their regulatory fees by instalments. This would help with budgeting and ease cash flow, the life-blood of small businesses. We are pleased that the FSA has listened to us - our work here could help every mortgage intermediary in the country.
"Additionally, we are also keen to track a like-for-like cost of mortgage regulation. Without this, the true impact of the move to full statutory regulation will never be known. It is too easy to lump mortgage and general insurance regulation together but this clouds the picture. Accountability means being transparent ˆ and that's what we expect from the FSA.
"The costs of statutory regulation are very high. Progress has undoubtedly been made so far but there is still more to be done. We will be holding urgent meetings with the regulator to reflect the views of our membership. Regulatory fees need to be proportionate to the market ˆ we believe the regulator should re-think."
