FSA broker fees to rise by only 2.7%

2 June 2009

Total fees payable by some financials adviser will also increase by 4.8% compared to the 15% rise that had originally been suggested.

The total amount the FSA needs to raise from firms this year has risen by 35.8% from last year’s fees, but the regulator stresses that actual amounts firms have to pay will depend on factors such as volume of business and the number of permissions.

While some firms will benefit from lower fee hikes than first thought, the regulator says there are other firms that will experience a higher fee.

For deposit-takers their total fees will shoot up from a proposed 94.9% increase on last year's fees to a massive 109.4% rise.

The regulator says the basic fee which all firms are required to pay will be frozen at 2008/09 levels as proposed in February’s consultation paper.

Once a financial penalty rebate is applied, the FSA calculates that about 10,000 small firms will see a fee reduction compared to the previous year.

Firms can see how much they will have to pay in regulatory fees in 2009/2010 by accessing the FSA's fee calculator.

Chris Cummings, director-general of Association of Independent Financial Advisers and the Association of Mortgage Intermediaries, says: “Following AIFA and AMI’s highly publicised fees campaign I am delighted that FSA has revised the fees paid by IFAs and mortgage advisers."

He says that the fee blocks that cover IFAs, brokers and advisers offering protection products will be saving £11.7m compared to the proposed fees.

He adds: "This is an appropriate and welcome measure in difficult economic times.

"AIFA and AMI strongly believe that regulatory resources, and therefore costs, should be focused on those firms that require increased supervision and not those in the IFA and mortgage advice professions.

“It is testament to the whole industry that uniting with one single voice on such a key issue resulted in FSA receiving 533 responses to the consultation.

"This weight of support has resulted in significant savings for firms compared to the proposed fees."

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