The budget is an increase of 3.25 per cent on the previous year’s budget of £267.4 million. The budget will also fund an overall 4.5 per cent increase in FSA staff pay.
The FSA anticipates around 82 per cent of firms will see a decrease, no change, or an increase of less than 3 per cent in their periodic fee in 2006/07. Current projections indicate minimum fee-payers will pay fees in 2006/07 that are no more than 2.5 per cent higher than those they paid in 2005/06, and many of them will see no increase at all.
The planned priorities for the FSA in 2006/07 include firm and market supervision, broadly in line with its current risk appetite. Central to this will be improvements to the ‘ARROW’ process; the way in which the FSA assesses risk and applies its resources. The FSA aims to begin the roll-out of the improved ‘ARROW II’ process from March 2006.
The FSA’s chief executive, John Tiner, said: “We continue to be alert to market developments and we identify in this Business Plan a small number of new themes.”
But Chris Cummings, director-general of the Association of Independent Financial Advisers (AIFA), said: “This year the IFA sector will be billed for £47.5 million – an increase of £10 million on last year’s amount. The smallest firms in the industry are being asked to pay the lion’s share of the funding of the Financial Services Compensation Scheme. How can this system be just?”
