The Association of Mortgage Intermediaries has hit out at the proposed fee hike outlined by the Financial Services Authority today damning the fee increases as disproportionate to the size of the broker market.
Earlier today the Financial Services Authority published a consultation paper outlining the proposed changes to the regulatory fees for 2010/2011 for financial services firms.
The regulator wants to impose a minimum £1,000 fee for each firm, regardless of its size.
For mortgage brokers, this would increase the fee they have to pay the FSA from the previous minimum of £745 to £1,000, a 34% increase.
Mortgage funding-related costs for the year rise by £3.5bn under the regulator’s proposals.
Robert Sinclair, director of AMI, says: “In responding to the banking crisis, the FSA appears to be laying the blame most closely at the door of mortgage intermediaries.
“We are struggling to identify the need for a 34% increase in costs for a sector that has shrunk to a fraction of its previous size.
“It was not the intermediary world that caused this crisis, but we appear to be picking up the tab.”
AMI has calculated that based on what firms were charged last year, a firm with a turnover of £500,000 is looking at a 32% fee increase, whilst a firm with a £5m turnover will see an 87% increase.
The trade body says that mortgage brokers now account for almost one fifth of the regulator’s overall funding requirement.
Sinclair adds: “This is not proportionate as the intermediary sector does not present the same risks as the banking and wholesale sectors.
“It is time for a root and branch review of the regulator’s costs which tackles the issue of who foots the bill.”
AMI says that the National Audit Office would have to carry out this review in order for it to be successful and credible.