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AMI hits out at FSA for underhand fee hike

The Association of Mortgage Intermediaries has slammed the Financial Services Authority for being underhanded by hiking mortgage broker fees by almost 10%.

Earlier this week, Mortgage Strategy revealed that the FSA is increasing broker fees from £13.12 to £14.33, for every £1,000 of their annual income.

The FSA claimed that because it has seen a drop in income from broker firms, brokers will have to pay a larger portion of their income to make up for the shortfall.

In its consultation paper it proposed that mortgage brokers would pay only £13.43 for every £1,000 of their annual income, but between the consultation paper in February and its final one this week, the FSA has re-estimated how much the average broker earns.

Robert Sinclair, director of AMI, says there is concern that the consultation was based on historic data to mask the real impact of the final rules. 

He says: “At best it lacked competence, at worst it appears underhand.

“While the FSA is right and many small firms will only pay the minimum levy of £1,000 for the FSA, firms may be in for a big shock.  With the 10% increase in FSA fees for brokers, we also have higher Money Advice Service costs, and for those carrying insurance permissions, the Financial Services Compensation Scheme levy to cover payment protection insurance will make a huge difference.  Total regulatory costs could rise by more than 40%.”

Sinclair says although the policy statement explained the changes in a short paragraph, there has been no dialogue, or openness.

He adds: “I am concerned that the newly divided FSA risks losing industry respect.  In the creation of a new statutory base, the new FCA is meant to be a new beast.  With fewer firms and pressure on incomes, the new regulatory framework must reduce its costs, not continue to load their expenses on to responsible firms.”

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  • Bob Cod 1st June 2012 at 2:21 pm

    Leave Liz alone – banks have been squezzing the broker just as much as the FSA by lowering proc fees, dual pricing, prohibitive criteria such as high arrangement fees etc etc. It’s no fun being a broker anymore. So I’m going to buy an ice cream van which plays yankee doodle dandy

  • Jon T 1st June 2012 at 11:26 am

    @ Anonymous 8:53pm

    If you’re going to have a snipe at people for simply expressing an opinion, have the courage of your convictions and put a name to your remarks. Anything else is cowardly. Just a thought.

  • Shock horror 31st May 2012 at 8:53 pm

    Nice bit of boring, basic, easy bank bashing there from Liz

    “hit the banks” she demands……the same banks no doubt who she was happy to chuck business at during the boom and let them line her pocket

    Yawn

  • Greg Abbott 31st May 2012 at 6:12 pm

    Surely with less mortgage advisers to regulate they can reducet heir staff costs and fees accordingly

  • broker about to go under - FSA not helping. 31st May 2012 at 2:48 pm

    Whats stopping the FSA upping our fees, nothing at all, they are unregulated and can do as they wish, if they decide to put our fees up 200% we still cant do anything, what a joke of a situation.

  • Shane 31st May 2012 at 2:24 pm

    In the article it talks about “FSA risks losing industry respect” I didn’t realise they had any left!? If you lose income you cut costs – that is business,except they don’t run it like a business, more like a charity and WE are the donors.

  • liz 31st May 2012 at 2:14 pm

    Hit the banks for the increased fees, not us, because lets face it they are the ones who have cost a lot of money to us all…