FSA to increase mortgage broker fees
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The Financial Services Authority has today revealed its Annual Funding Requirement for 2012/13, which includes an increase in the fees mortgage brokers will pay.
Overall the AFR for 2012/13 is £578.4m, up from £500.5m in 2011/12 - a gross increase of 15.6% in overall funding.
Mortgage brokers will have to pay the FSA £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 Consumer Financial Education Body - will increase from £1.36 to £1.51, for every £1,000 of brokers’ annual income.
The fee to the Financial Ombudsman Service - the Ombudsman Compulsory Jurisdiction levy - is falling from £110 to £50 per firm.
But firms will also need to pay 2% of the £17m total rather than 1.5% of £44m in the previous year.
The FSA is basing its calculations on the presumption that there will be 5,732 brokers paying the fees, up from 5,729 the previous year. It estimates the annual income of the intermediary sector will be £1.2bn - the same as last year.
Robert Sinclair, director of the Association of Mortgage Intermediaries, says: “AMI continues to be concerned about the significant costs being absorbed by the mortgage advice industry, whilst it is acknowledged we do not present systemic risk.
“The on-going cost at £15m to mortgage intermediaries for the MMR and supervision is still a significant proportion of the overall FSA budget and whilst we are seeing restraint from the Ombudsman and the Compensation Scheme, we are concerned about the wider industries bill for the Money Advice Service.
“The acknowledgement that intermediaries should not bear the brunt of this cost is welcomed, but this will be passed on to consumers in higher prices.”
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Readers' comments (11)
Easy Pickings | 2 Feb 2012 4:01 pm
£587million, less £87million paid to MAS which nobody wants should see all advisers fees fall this year Not increase.
Spend the money where it is needed
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Stuart Duncan | 2 Feb 2012 5:06 pm
Is it just me? If the government wants to improve financial education then surely the government should pay for it. I believe that most small firms see the MAS as a potential competitor that is neither wanted nor needed and that the powers-that-be should promote proper advice not yet another gravy train at our expense.
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Anonymous | 2 Feb 2012 6:06 pm
More fees hooray! I was really struggling with what do with the abundance of cash I'm earning now that the mortgage market has finally improved!
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Anonymous | 2 Feb 2012 6:57 pm
Hooray! more fees. Thank goodness, I was at a total loss as to what to do with my abundance of cash now that the mortgage market is thriving again! Afterall its only us advisers who have to remain competitive isnt it? whilst others can divide the sum they need in by the number of brokers left in the market.
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Anonymous | 3 Feb 2012 8:23 am
3 more brokers in the industry & fees go up overall by 15.6%?!
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Anonymous | 3 Feb 2012 9:26 am
Just like a bully with no one stopping him the FSA carry on kicking the brokers head.When will it stop?
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AA | 3 Feb 2012 10:47 am
This is where Robert Sinclair AMI has to support us fully and im sure AMI will.
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Cull FSA, Not Badgers | 3 Feb 2012 11:01 am
The sooner this godforsaken gang/group/authority is removed the better. As regulaters of the Financial Services, they seem to have been the only player in the market to have got away with everything! The should have been regulating. If anything they were to blame for a lot of the mess we are in now. If im led to beleive my sources however, a PANORAMA special is soon to be unearthed about them and their incompetance. Jobsworth.
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Handy Andy | 3 Feb 2012 11:52 am
AMI; a once mighty tiger that has now lost its teeth, its tail and its stripes! Sorry, Robert Sinclair is as much use as a chocolate teapot!
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Damien Brassneck | 3 Feb 2012 12:48 pm
Remember the MCCB anyone? Their annual budget was £5m. Puts things into proportion somewhat me thinks!
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