The FSA said 60% of firms would pay less due to the “introduction of a fairer and more transparent fee structure” which would levy the cost of “intensive supervision” on “firms whose size and impact require most regulation from the FSA”.
Robert Sinclair, director of AMI, said: “It’s a big increase for many people and we think it’s unfair that some firms are paying disproportionately high fees.
"It’s hard to say more than that until we see a full review of these fees and their structure though.
“Clearly the cost of the MMR is upping the pressure, but at a time when most brokers income is already under severe pressure, it’s a problem.”
Sinclair said there is now a minimum fee of £1,000 payable by everyone which is an uplift from the previous level of £745.
Thereafter, fees are charge on a turnover basis. He added said it was hard to be accurate about the level of increases, but a ten man firm could expect to see a jump of around 30%. And in the largest firms, around the rise could be as much as 80% depending on business mix and turnover.
The FSA acknowledged in the report that: “Apart from one comment that the levies paid by Independent Financial Advisers (IFAs) were disproportionate to the costs they created for the FOS, there was support for – or agreement with – the proposed rates for the other industry blocks.”
The Association of Independent Financial Advisers said: “For this year, while the smallest directly-authorised firms will benefit from a reduction in FSA minimum fees, other small firms will face substantial increases.
“Overall, the cost per adviser has increased by between 2% and 9% over the consultative rates for IFAs not holding and holding client money respectively. This is due to the combination of a further increase in funding requirements combined with a small reduction in overall numbers of advisers.
“This is on top of the significant increases seen by some firms as a result of the move to a straight-line recovery method.”
Brokers should calculate their periodic FSA fees online at:
http://www.fsa.gov.uk/Pages/Doing/Regulated/Fees/calculator/index.shtml.
