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.”