Brokers protest at high funding requirement rise

Most brokers will pay at least 15% more in Financial Services Authority fees in 2011/12, the Association of Mortgage Intermediaries says.

The FSA Annual Funding Requirement for 2011/12, released last week, revealed it is increasing its funding by £45m to £500.5m, up from £454.7m in 2010/11, a gross increase of 10.1%.

The regulator says the increase will be borne by larger firms, reflecting the resources applied to supervision of high impact firms.

However, the enforcement fines the FSA imposes during the previous year are returned to the industry by way of discounts to their fees in the following year. This means that in total firms will pay 2% less than last year.

The FSA is increasing its AFR for home finance providers and administrators by £3.4m, a 36% rise, which it says reflects enforcement work on the treatment of customers with mortgages in arrears.

But AMI has called for a detailed FSA response to explain what the mortgage industry’s £28m fees are spent on. Robert Sinclair, director of AMI, says: “Given the burden will be borne by fewer intermediaries, most firms will pay 15% more.

“Last year’s fees were of a similar amount but included costs associated with individual registration. As this has now been delayed, we must ask why any savings do not appear to have been passed on.”

He adds: “The figure seems disproportionately large given the total cost of £4m paid in 2004 under the Mortgage Code Compliance Board.”