AMI hits out at FSA's 2% hike in broker fees
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Robert Sinclair, director of the Association of Mortgage Intermediaries, says the regulator’s proposed increase in broker fees is hard to swallow, given the difficulties they are facing.
Last week the FSA released its consultation paper on its annual funding requirement for 2012/13. Overall for 2012/13 it is £578.4m, up from £500.5m in 2011/12 - a rise of 15.6%. Broker fees will increase to £13.43 for every £1,000 of their annual income, up from £13.12 in the previous year.
Meanwhile, fees payable to the Money Advice Service - the FSA’s consumer financial education body - will rise from £1.36 to £1.51, for every £1,000 of brokers’ annual income.
The fee to the Financial Ombudsman Service is falling from £110 to £50 per firm. But brokers also need to pay their part of FOS’ compulsory jurisdiction levy. The mortgage broking industry will need to pay 2% of the £17m total rather than 1.5% of £44m in the previous year.
Sinclair says it will be tough to get the regulator to change its stance on fees, but it will be responding to the paper, requesting a reduction.
He says: “The increase is difficult to swallow when you hear that the FSA continues to hand out bonuses to staff when many broker firms are choosing to implement pay cuts instead of making employees redundant.”
The FSA says a significant part of the increase in this year’s AFR reflects the costs of implementing the government’s reform of the UK regulatory framework.
David Sheppard, managing director of Perception Finance, says it is a member of a network so will not see a direct increase in fees, but he expects the cost to be passed down eventually through network fees.
He says: “Overall, the FSA’s funding increase for 2012/13 is large and it will need to prove it offers value for money. The regulator should be held to public account for how it spends the money.”
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