View more on these topics

AMI calls on FCA to explain “disproportionate” rise in broker levy

The Association of Mortgage Intermediaries has called on the FCA to explain why its levy on mortgage brokers and lenders is set to increase by 4 per cent, while the industry-wide increase is just 2.7 per cent per cent.

The FCA says that its budget for ongoing regulatory activity this year is £537.7m, up by 2 per cent on 2018/19.

In order to pay for this ongoing work, plus changes to its regulatory scope and additional costs relating to Britain’s exit from the EU, the FCA says its annual funding will need to increase by 2.7 per cent to £558.5m.

However, the watchdog is proposing that fees for lenders, brokers and mortgage administrators rise by 4 per cent year-on-year, which Sinclair points out is double the CPI rate of inflation.

Elsewhere in the paper the FCA anticipates that the actual sums paid by individual brokerages will drop by an average of 2.9 per cent this year due to an increase in the number of fee-paying firms and higher business volumes.

The cost for fee block A2, which is paid by “home finance providers and administrators” has been set at £17.9m, while the cost for fee block A18 relating to “home finance providers, advisers and arrangers”, is £17.6m.

Ami chief executive Robert Sinclair says the levy increase for mortgage advisers seems “disproportionate”.

He argues that the key regulatory changes stemming from Brexit affect the investment sector rather than the mortgage market.

While the FCA appears to have excluded brokers from the extra cost burden of the regulator’s Brexit work, it is not clear what has prompted the levy increase.

Mortgage lenders and administrators’ costs have been partly affected by changes in regulation of the securitisation market, but this has not been applied to brokers.

Sinclair says: “There appears to be no explanation in the report as to why such a significant increase is being applied to firms in the mortgage sector.

“I am not aware of any significant impact of Brexit on the FCA’s work in relation to mortgages.

“Ami has had no discussions with the FCA on Brexit-related issues affecting mortgage reguation because there were not deemed to be any.”

Recommended

buy-to-let

FCA to target second charge and sub-prime sector

The Financial Conduct Authority has revealed plans to closely examine the second-charge and sub-prime mortgage market this year over concerns that some lenders are setting out to profit from borrowers who are unable to repay their loans. In its business plan for 2019/20 the regulator set out its priorities for the year ahead, including ongoing […]

FCA reminds brokers about SM&CR

The FCA is reminding brokers to prepare for the Senior Managers and Certification Regime which comes into force on 9 December 2019 The FCA has already rolled out the SM&CR to banks and insurance firms and is extending the regime to the 47,000 broker firms it regulates. The aim of the SM&CR is to establish […]

Comment: FCA makes clear that GI needs good advice

The FCA recently published a report on the general insurance distribution chain and warned general insurance firms that it “will not hesitate to intervene” if firms fail to meet their obligations to customers. Rules introduced from 1 October 2018 following implementation of the Insurance distribution directive are directly relevant to the manufacture and distribution of […]

FCA warns insurance firms over value for money

Insurers’ manufacturing, sales and distribution approaches can lead customers to buy inappropriate products, pay excessive prices, or receive poor service, the FCA has warned. In a paper this morning, the FCA highlights that distribution chains can involve multiple parties and, because of the way each is paid, consumers end up paying a higher price – as […]

Newsletter

News and expert analysis straight to your inbox

Sign up