Trade body says the mortgage sector should not bear a disproportionate share of the costs
The Association of Mortgage Intermediaries (AMI) has said it will challenge the Financial Conduct Authority’s (FCA) proposal to increase, by 10.4%, the cost of regulating the mortgage intermediary sector.
While still at consultation stage, the proposal is to charge larger firms in the mortgage intermediary sector 10.4% more in both the mortgage and protection classes. AMI said that the actual fees rates are flat for mortgages and only 7% higher for protection.
“We will be challenging the 10.4% increase in the cost of regulating our sector as the funding requirement has only increased by 8.4%,” Robert Sinclair (pictured), chief executive at the Association of Mortgage Intermediaries, stated. “We do not have any explanation as to why the mortgage sector should bear a disproportionate share of the costs.”
Due to lower Financial Services Compensation Scheme (FSCS) costs, if firms have the same turnover as last year, they should find their fee invoices are broadly the same. Firms with an increase in turnover, particularly on their protection business, will see higher fees compared to last year. Small firms have their fees frozen at the same level as last year.
“We welcome the holding of smaller firms’ fees in these turbulent times,” Sinclair remarked. “In a volatile interest rate environment, it is important that consumers have access to as many advisers as possible.”
Meanwhile, firms with appointed representatives (ARs) or introducer appointed representatives (IARs) will also see the levy per AR and IAR frozen at the 2022-23 rates, at £266 and £80 respectively.
AMI also convinced the FCA that the £5 million of costs from bringing funeral plan providers under FCA regulation should be covered by firms within that sector and not the broader fee-paying population, as proposed. As a result, mortgage intermediary firms will no longer have to contribute to this cost recovery.
“AMI has again demonstrated its value to the industry by challenging charging all firms for the costs of creating a new authorised class of firms. This is an important precedent,” Sinclair said.
The FCA issued its 2023-24 fees and levies consultation paper last week. The consultation opened on April 5 and was scheduled to close on May 11, 2023.
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