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FSA to hike mortgage broker fees by almost 10%

The Financial Services Authority is increasing mortgage broker fees by almost 10%, its Annual Funding Requirement for 2012/13 has revealed today.

In February the FSA launched a consultation on its proposed fees for the financial sector and has today released the final levies.

In its consultation paper it proposed that mortgage brokers would pay £13.43 for every £1,000 of their annual income in 2012/13, up from £13.12 in the previous year.

However, it has hiked this to £14.33 of their annual income for every £1,000 of business.

Meanwhile, fees payable to the Money Advice Service – the Consumer Financial Education Body – will increase from £1.36 to £1.67, up from the proposed £1.51 in its consultation.

Overall, mortgage brokers, who fall within block A.18, will be charged £14m for 2012/13, down from the initial estimate of £14.5m.

The FSA estimates there are 5,473 firms that fall into this fee block, but it says because they have seen a drop in income they will have to pay more in fees.

In its report, the FSA says: “For A.18 we have seen a reduction, of around 10%, in the income tariff data submitted by firms in this fee-block.

“Consequently year-on-year final fee rates will go up 9.2%, negating the effect of a 7.3% decrease in the AFR allocated to this fee-block.”

Robert Sinclair, director of the Association of Mortgage Intermediaries, says: “It is an exceptionally difficult time for our industry and we continue to see income levels come under pressure.

“The regulator appears to want to continue to increase the amount of fees levied at mortgage brokers.

“This is unsustainable and will cause firms to consider whether the FSA costs are worth the risks they are taking in this business.

“The FSA needs to stand back and ensure it balances the cost of regulation with the amount it is asking firms to pay.”

Overall, the amount financial firms have to pay has been reduced by £18.6m from the proposed figure of £578.4m to £559.8m.

This compares to £500.5m for 2011/12, which represents an increase in annual funding of 11.9%, compared to the 15.6% increase proposed in the original consultation.

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  • Bobby 1st June 2012 at 7:23 am

    The FSA are an organisation beneath contempt. I lost all respect for them a long time ago. They are a bunch of bullies and bean counters who have no grasp of reality and the real World where brokers fight tooth and nail just to survive on a daily basis. How can anyone respect an organisation who under their remit of ” regulation ” allow Banks to do hundreds of thousands of non advised sales ? For this reason alone they are a complete joke but it is clear their agenda is to wipe intermediaries from the face of the Earth. I have no doubt about this now. The farce is the FSA are supposed to protect the public and encourage advise and everything they have ever done is contrary to this. We now have a population who take out ” rate of the week ” non advised mortgages, getting expensive and unsuitable insurances on the back of this and do not take out pensions as IFA’s have been decentivised to sell them anymore. It is an unholy mess and the FSA are without doubt the most failed and discipable organisation in the UK and are a law unto themselves and accountable to no one.

  • Fat Mortgage Bloke 30th May 2012 at 6:32 am

    Guess I will just have to increase my fees to reflect rising costs.

    Oh…. hang on a minurte the blokes that operate out of the spare bedroom are still doing mortgages for nothing!!!

  • JOHNNY 29th May 2012 at 4:16 pm

    IT SHOULD PAY FOR THE FSA XMAS DO WHICH COST £800,000 IN DECEMBNER 2010.

    DUSGUSTING AND NON ACCOUNTABLE ESPECIALLY FOR NON REGULATING THE FINANCIAL MELTDOWN IN NOV 2007. WELL DONE FSA! PAY RISE FOR BRINGING DOWN THE BANKS.

    JW

  • Gary 29th May 2012 at 3:27 pm

    Soon the FSA will have milked the cow (broker industry) to death.
    Once this has happened I hope they feel our pain.

  • Tony Broke 29th May 2012 at 3:01 pm

    Now come on Boys n Girls did you not see the recent salary list of these good people from the FSA. Over 300 of them on over £100,000 per year. 50 or more on over £300,000 each per year. Surely you wouldn,t begrudge them a decent payrise!
    Bye Bye everyone

  • Dave 29th May 2012 at 2:59 pm

    Actually, it’s quite hard being an ANGO – an Autonomous Non Government Organisation.

    Some people think we are a QUANGO which is only Quasi-Autonomous, but in reality we’re not accountable to anyone anymore, so we just do what we want.

    We’re going to be replaced soon, so it’s time to finish what we started and go out in style!

    We sit all day in our ivory tower (well our canary wharf) and wonder what is going on outside in the real world, although not enough to actually go out there and see for ourselves.

    It’s much more fun to sit up here, admiring the expensive artwork on our walls and make up rules that keep everyone guessing. I wonder what’ll happen to that artwork when the curtain falls… mmm, would anyone miss it if one or two nice pieces went walkabouts?

    It’s been a lot of fun, but all things must come to an end. When we started, there were thousands of those irritating intermediary firms who just would not join networks and make our lives easier. It’s taken a lot of hard work to get their numbers down and we’ve even had to venture out into the provinces to visit the oiks in their own little mediocre offices. The North of England was particularly disgusting. Why would anyone want to live in Derby for goodness sakes?

    Still, we’ve had some excellent golf days with our friends at the British Bankers Association. Most of our top people came from there after all, so we all speak the same language.

    No, it’s the brokers we really need to finish off. I mean, if they broke it, then they should pay! That’s why we’re putting their fees up again. If the MMR doesn’t do it, a whopping increase in fees should see a load more off.

    However, did the MCCB manage of just £4.5m a year? We spend more than that on lunches. No chance that we will ruin it for our successors (when I say successors, I expect we’ll all get recruited to the FCA – we don’t want to kill the goose that lays the golden egg do we?) If we increase our fees by four to five times the rate of inflation now, it make us (sorry, them) look good when they come in and announce a freeze on fees for the first year or maybe two.

    I wonder when we’ll get our knighthoods?

  • Sam Jones 29th May 2012 at 2:18 pm

    The FSA are so keen to ensure that brokers are giving good advice and not acting in a way where they put income ahead of advice and yet they increase fee’s putting more pressure on brokers to earn more in a very hard market.

    Brokers are only human… only so much pressure.

  • GORDON ENSOR 29th May 2012 at 2:17 pm

    FSA we all know what the A stands for, its about time the FSA were made Self Employed as the Brokers they are screwing

  • Speechless and dumbfounded 29th May 2012 at 2:14 pm

    Oh My God! If only I could increase my income at the stroke of a pen!! The FSA should do what we have all had to do over the last three years. Tighten your belt and get rid of the vast numbers staff who are riding the FSA gravy train! We are so far down the slippery slope to ‘direct only bank mortgages’ and the FSA continue to pour oil on that very same slope! So much for TCF and consumer choice? I think not.

  • NB 29th May 2012 at 2:12 pm

    Come on guys be fair – who will keep the FSA in tea and biscuits if we don’t!

  • Mark Stroud 29th May 2012 at 2:09 pm

    With such stern words from the AMI I am sure the FSA will reverse their decision!

  • anon 29th May 2012 at 1:53 pm

    Nice to see in times of a recession we are all taking a hit, (ohh no wait the FSA have imposed a 10% increase) one rule for one , another government quango makes its own rules. In times where companies are seeing reductions in income, this is a bitter pill to swallow.

  • Dazed & Confused 29th May 2012 at 1:48 pm

    Good old FSA…always manage to pull a rabbit from the hat when you least expect it!

    Now…could someone PLEASE explain how this actually works? Mortgage Brokers receive less income due to a collapsing market. To stay afloat they have to reduce their running costs accordingly. The FSA, our gallant regulatory body also have their income trimmed as their levys fall short, so what do they do? Make the Mortgage Brokers pay more! Seemples!

    Do they REALLY want to completely decimate the mortgage broking community…I think I actually know the answer to that!