FSA fees reform could cut advisers’ bills by £45m

Reform of the way the Financial Services Authority calculates its fees would slash the bill for advisers by about £45m, says the Association of Independent Financial Advisers.

AIFA argues that advisers are shouldering an unfair burden when it comes to regulatory fees and has recommended reforms that would distribute costs more evenly.

The proposals are part of AIFA’s response to the FSA’s consultation on fees and are supported by evi-dence from forensic accountant RGL Forensics.

RGL Forensics says that in the short term the discrepancy in fees could be tackled by charging accor-ding to a firm’s profitability rather than the fee block system.

It is estimated that this would cut the bill for adviser firms from £70m to between £22.7m and £24.6m.

The long-term plan is to overhaul the fee block system so that advisers would pay an amount that relates to how much they earn from different financial products.

AIFA director-general Chris Cummings says: “The analysis from RGL Forensics sets out a simple redistribution of FSA’s indirect costs that are currently allocated to the fee blocks without justification. This would be a significant step forward.

“We then hope the regulator will work with us on a radical overhaul of the entire fee system.”