Sesame ARs face 50% hike in membership fees

Sesame is raising its fixed membership charges for appointed representatives by 50%, with overall costs increasing on average by around 9% per firm.

Currently, the fixed fee for an IFA firm is £29.20 a week including VAT, but this will increase to £44.20 a week including VAT from August 1.

Mortgage and general insurance firms currently pay £19.21 a week including VAT, but this will go up to £29.21 a week, including VAT.

A weekly fee is charged for each additional adviser within a firm. From August 1, IFA firms will see this rise from £28.58 a week to £43.58 a week per adviser, an increase of 52.4%.

Mortgage brokers will see the charge for each additional adviser increase from £19.21 a week to £29.21 a week.

Sesame is also hiking the percentage of turnover it retains from its IFA member firms. The standard commission retention rate for mortgage firms will remain the same.

The network will also raise the amount it deducts from individual proc fees from mortgage transactions from 0.015% to 0.02% from August 1.

Taking into account all the changes to the charging structure, Sesame says the average member will see a 9% increase in their fees compared with last year.

The network has around 1,200 appointed representatives.

Nick Kelly, managing director of Sesame, says the decision was taken as a result of increased regulatory burdens from the Retail Distribution Review and the Mortgage Market Review.

He says: “It has been five years since we increased the charges materially. During that time, we have not only got increased running costs but a regulator which has put more systems, controls and oversights in place.

“And while we work hard to improve the range of services and commercial leverage a business like Sesame has in the market, there comes a point when it is clear what the costs are going to be to get through the RDR.”

He adds: “You make the decision that you have to be transparent and have to act in a reasonable way.”