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Networks to lobby FSA as regulatory fees soar

Networks are lobbying the Financial Services Authority to reconsider its position on regulatory fees as Mortgage Next reveals its FSA bill is a whopping 110% higher than last year.

Addressing delegates at Mortgage Next’s annual conference in Nuneaton last week, Gemma Harle, managing director of the network, revealed that the way in which costs had been recalculated by the FSA was of great concern.

Speaking to Mortgage Strategy, Harle says she resents the idea that brokers, clients and networks should have to foot the bill for higher regulation costs when they are likely to pose the least threat.

The network has yet to decide how its fee increase will affect brokers.

Harle says: “We will have to make the decision about whether we have to pass the cost on to the brokers, which would then be passed on to the clients.”

Harle also argues that it seems at odds for networks to carry part of the fees burden when they are actually helping firms meet compliance requirements.

She adds: “Networks are doing part of the job for the FSA. The good networks make its life easier.”

Brokers who want to cancel their permissions need to do so by March 31 , and in a poll of 1,000 readers, 320 brokers say they are considering that.

The final bill for financial services firms will be set in May, so brokers planning to stay in the market are agreeing to regulatory fees blind without knowing the true cost.

The FSA is inviting comments on a fees consultation paper, which closes on April 6.

John Cupis, managing director of mortgages and general insurance at Sesame, is calling on its members to make its feelings heard on the subject.

He says: “We are shocked at the proposed hike in regulatory fees.

“In the run-up to the FSA’s April 6 consultation deadline we are joining forces with the Association of Independent Financial Advisers and the Association of Mortgage Intermediaries by urging our members to help lobby the regulator for a rethink.

“We need to send a single clear message about the dangers being posed to the advice profession, along with the millions of clients who benefit from our services.”

The lobby for change comes more than a month after the AMI first warned that network costs were set to treble and appointed representatives may have to pay out additional fees as a result.

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