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FSA hikes mortgage broker fees by 33%

The Financial Services Authority has today released its annual funding requirements for 2010/2011, which shows mortgage brokers face a 33% fee increase.

Mortgage firms will now have to pay a flat fee of £1,000, compared to roughly £745 in the previous year.

Larger mortgage firms and networks will have to use the FSA’s calculator to work out what they will have to pay on top of the flat fee.

The Association of Mortgage Intermediaries had been campaigning for the regulator not to introduce the proposed fee hike.

It has previously estimated that based on what firms were charged last year, a £500,000 turnover firm is looking at a 32% fee increase, whilst a £5m turnover firm could see a 87% increase.

The FSA has increased its annual funding requirement for the mortgage sector from £10.9m in 2009/10 to £14.4m for 2010/11.

The regulator says its costs are increasing in terms of supervising the sector primarily concerning the work associated with the Mortgage Market Review and enforcement activity in relation to mortgage fraud work.

Overall the FSA’s annual funding requirement for 2010/11 is £454.7m, up from £413.8m in 2009/10.

Robert Sinclair, director of AMI, says the FSA proposals represent a substantial increase in fees for mortgage intermediaries who already face a tough economic situation.

He says: “Mortgage intermediaries were already paying a disproportionate share of regulatory costs, which are ultimately and inevitably met by consumers.  

“For those mortgage intermediaries paying just minimum fees and who also hold insurance permissions the increase will be limited. But for larger firms, and those without insurance permissions, their FSA fees will rise in some cases disproportionately and significantly.”

He says the FSA has however decided not to raise the fee tariff rate for mortgage intermediaries from that proposed in the consultation paper, despite the considerable reduction in the tariff basis from that originally consulted on.

He adds: “We will continue to push for a fairer cost distribution system for the intermediary sector.”

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  • David James 3rd June 2010 at 4:11 pm

    You are right matey. I’d vote for that party who brought in HIPs and so much regulatory nonsense that it will take years to shift. Bring back Gordon! In your dreams pal!

  • john 3rd June 2010 at 7:03 am

    Things like that happen when you dont look at the big picture and vote accordingly rather than for one issue and self satisfaction!!

    Will you be voting Conservative next time?

  • David james 2nd June 2010 at 1:25 pm

    The Conservatives gave a pledge at the election to get rid of the FSA.
    Why have we heard nothing whatsoever on the subject?
    Most Brokers voted Conservative because of this pledge and I am sure like me they feel very badly let down!

  • Andy Valvona 1st June 2010 at 11:19 am

    Higher FSA Fees will equal less brokers in the marketplace.

    Less brokers means more business for each broker left, and less brokers for the FSA to regulate.

    That’s what the FSA thinks, so they really aren’t bothered about the affect on those brokers who are struggling – they almost certainly beilieve that the strong will survive, and that they are actually doing them a favour!

  • Liz 1st June 2010 at 10:37 am

    I had a letter from the FSA today saying that we had been reported to them as not being authorised to sell mortgages, and it appeared to them that was te case. We are authorised, of course, but what shocked me was that the letter concluded by saying ‘The FSA does not consider it in the public interest to pursue this matter further and we will now consider the matter closed.’
    What a joke! If we weren’t authorised shouldn’t they be taking steps to shut us down? What do they actually do?? And what is exactly in the public’s interest?

  • MR T BONE 30th May 2010 at 10:04 am

    If these F***wits had been doing their job i.e. regulating the banks competently we wouldn’t be in half the mess were in now.The whole set-up should be replaced with a organisation fit for purpose immediately if not sooner.

  • david salt 29th May 2010 at 4:13 pm

    sounds like intermediaries only have their counterparts in the profession to blame…what with the FSA’s rising costs due to brokers commiting mortgage fraud. Shame for the many brokers who are very good and legit

  • Jerry 28th May 2010 at 4:28 pm

    Further proof that:

    The FSA have a not so well hidden agenda to slowly irradicate the small advisor practice.

    They exist on a different planet to us,they obviously have no perception of the difficulties that a small practice has endured over the last twelve months.

  • Bobby 28th May 2010 at 3:18 pm

    Come on Guys the embossed FSA bottled water does not come cheap you know.

    Also this may be a shock but the FSA DON’T give a damn what we think so don’t waste your time putting our case forward.

  • Stewart Robertson 28th May 2010 at 2:40 pm

    And, fellow brokers, when the Approved Persons regime come in, the fee will be £1000 per broker.That is the currennt annual fee for an approved person.

  • Darryl Barnett 28th May 2010 at 2:25 pm

    Come on Cameron…….get rid.

  • lester evans 28th May 2010 at 2:19 pm

    does anybody at the FSA read the comments on these pages?
    if so,
    would they please pass commment (ie post a response) to let us know, why they think, the people that they regulate, only seem to have negative comments to post on these pages, about them, their service, and their performance.

  • vp73 28th May 2010 at 1:48 pm

    All us Independent Mortgage Brokers might as well just stop trading now and let the banks take over just like the FSA wants us to. Why the FSA wants this to happen god only knows, we all know that banks sell products and good IFA’s provide financial advice. Maybe one day the FSA will realise this, but I fear it will be too late by then as all the good advisors will have long left left the industry….like me!

    Also, imagine the cost and time needed to deal with all the customer complaints if banks were dealing with all the industry;s mortgage advice. Maybe that’s the next step to switch to a complaints officer becuase if banks take over then there is going to be one hell of a recruitment drive within the FSA Complaints Dept.

    All IFA’s need to start some kind of action group to fight the FSA’s dictatorship and incompetence before it’s too late

  • Mark Notley 28th May 2010 at 1:36 pm

    As the FSA have been dishing out record fines recently, especially to the high st banks, why cant they use this money to balance their books instead of continously bleeding us dry ? or as normal do they issue the fines on the never never – toothless is the expression

  • Wake up Time! 28th May 2010 at 1:13 pm

    The comments in regard to the FSA all broadly make sense but with no regulation of the regulator it will do what it wants when it likes. In respect of AMI, these are peas from the same pod. How Sinclair won an award for mortgage personality of the year is quite astounding!

    Let it be known there are many brokers who AMI will not ‘allow’ to join because they are known to criticize the regulator et al.

    You are on your own boys and girls, I might suggest cancelling your membership of the toothless AMI ASAP in order to subsidise your FSA fees.

  • nick hopkins 28th May 2010 at 12:39 pm

    Come on AMI we need your help NOW. The fees for small brokers are now rediculous!
    HELP
    HELP
    Iam a fully paid up member!!!!!

  • Martin Tapper 28th May 2010 at 12:38 pm

    Good for the goose and the gander…
    The primary effect of this review is to eliminate bad practice. Having eliminated the bad practice there will be less need for intervention by the FSA, so they can shed staff that will no longer be needed.
    I call for a new protocol called TBF – it stands for Treating Brokers Fairly. It is refreshing to see some lenders applying this principle at least. FSA take note.

  • Streve Brockman 28th May 2010 at 12:38 pm

    When will the F.S.A. realise that with the business volumes reducing to almost nil they are killing the geese that pay their wages etc. Everybody is trying to reduce their outgoings to survive the credit crunch but the F.S.A who are responsible in part for the current situation due to their inability to properly regulate the Banks and other lenders who have got away with murder in their lending policies, seem to be unable to grasp how bad it is out there. No doubt the Scottish Team sent to complete the TCF visit to a firm in London stayed in a B&B to save costs? I don’t think so!!

  • Stephen Rodley 28th May 2010 at 12:37 pm

    Here Here…

    To ALL of the above comments!

  • James H 28th May 2010 at 12:31 pm

    pants down, come and give me some more, I can take it, go on, you know you want to

  • Fiona Andrews 28th May 2010 at 12:30 pm

    I will say, once again, the EU and British Government want rid of all IFA’s and mortgage brokers! We are too hard to regulate and as the EU only offer advice through the Banks they have no understanding or concept of the British system. They are both deliberately making our working life so hard and so expensive over a period of say 10 years we will all have left the industry. Thus achievng their long term goal. The Banks continue to win, the Government get their miney back and the public are totally screwed. TCF – what a joke!

  • Henry Evans 28th May 2010 at 12:25 pm

    I would prefer to have seen the headline, ‘FSA slash staff numbers and cut back on their expensive offices, to curb excessive spending’.
    Let us all unite and try to get the FSA to understand that if they increase fees they will lose fee payers and if they lose fee payers their fee income will reduce.

  • James H 28th May 2010 at 12:19 pm

    cosmic do they want the shirt off my back as well?

  • Mark Bulley 28th May 2010 at 12:18 pm

    Incredible – we are all doing so much more mortgage business to cover the increased cost – village idiots springs to mind !!

  • g 28th May 2010 at 12:18 pm

    that’ll pay for the windows cleaned.

  • Dazed and Confused 28th May 2010 at 12:15 pm

    Well, they have to pay for surveys on how the MMR will affect those of us who are left in the mortgage market after the FSA have finished squeezing the life blood out of us all!

    Come on guys give us a break PLEASE?

  • Barry Davis 28th May 2010 at 12:13 pm

    Well I how else can they replace their lost revenue from all the mortgage brokers that have gone out of business, they need to keep their jobs well funded (just like their pension scheme is !!!!!)

    Now in these times good business practice and in their words TCF, they should be looking at cost controls to run thir business effectivly in the current market climate, maybe they need to spend a few million on a consultant to write them a business plan as they can’t do their own very well

  • Barry Davis 28th May 2010 at 12:12 pm

    Well I how else can they replace their lost revenue from all the mortgage brokers that have gone out of business, they need to keep their jobs well funded (just like their pension scheme is !!!!!)

    Now in these times good business practice and in their words TCF, they should be looking at cost controls to run thir business effectivly in the current market climate, maybe they need to spend a few million on a consultant to write them a business plan as they can’t do their own very well

  • john higgins 28th May 2010 at 12:11 pm

    This is further proof that the Association of Mortgage Intermediaries has no effect on the FSA whatsoever. They talk a great game but always fail to deliver.

  • joke 28th May 2010 at 12:11 pm

    lending in decline,proc fee’s reduced and the FSA justifiy increase fee’s,for failing to supervise the lenders corectly,more brokers will be leaving the industry next year.

  • Trevor Johnston 28th May 2010 at 12:10 pm

    I like the way they blame the additonal costs on the mortgage market review. So whos idea was that then?

  • Ian Mason 28th May 2010 at 12:06 pm

    and we keep on getting emails saying the fees for next year will be reduced thought it was too good to be true after all the FSA have to have their expenses dont they?

  • Anon 28th May 2010 at 12:04 pm

    Someone has to pay for the 5* hotels these chumps stay in right?!

  • Anon 28th May 2010 at 12:04 pm

    Someone has to pay for the 5* hotels these chumps stay in right?!

  • Anon 28th May 2010 at 12:02 pm

    Surely this means these increases will just be passed on to the consumer in increased ‘broker fees’.

  • Anon 28th May 2010 at 12:02 pm

    Surely this means these increases will just be passed on to the consumer in increased ‘broker fees’.