Apfa: Brokers and IFAs face 30% FCA fee hike

Apfa estimates advisers’ regulatory costs could jump by up to 30 per cent as part of the Financial Conduct Authority’s £432m budget for 2013/14.

Chris Hannant 480
Apfa policy director Chris Hannant

The FCA published its business plan yesterday which sets the regulator’s annual budget for next year at £432.1m. The figure is a 23 per cent reduction from the FSA’s £559.8m budget in 2012/13.

Out of the total £432.1m FCA budget, the industry will pay £391.5m, following £40.6m in retained FSA fines to reduce the amount paid by the industry in fees.The business plan suggests around 30 per cent will be paid for by investment advisers, mortgage advisers and general insurance brokers.

Apfa policy director Chris Hannant says: “The precise details of the FCA’s budget for the next year are not yet clear. However, our initial calculations suggest there will be a big hike in fees for all types of intermediaries, potentially up to a 30 per cent rise.

“While we do not know the breakdown, this could come as a further blow to advisers already dealing with the impact of the wider economic environment and the costs of RDR. It is particularly disappointing that firms are still unsure exactly what their total bill will be for next year.”

The FCA will publish a paper next week setting out the fees firms will pay. Last year advisers in the A13 fee-block, covering advisers that do not hold client money, paid £37.1m towards the FSA’s annual budget.

Combined with the £38.6m paid for by advisers that hold client money, the £14m paid by home finance providers and mortgage advisers, and the £23.3m by general insurance brokers, advisers last year paid a total of £113m towards the FCA’s annual budget.

Many firms were shielded from higher regulatory costs last year as they fell into the A0 fee block, which means they only pay the minimum fee of £1,000. Overall 42 per cent of firms in the A fee-blocks only pay the minimum fee.