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Support our campaign to bring down FSA fees

Mortgage Strategy today starts its Bring Down FSA Fees campaign. We are calling on the Financial Services Authority to reduce its annual fee to mortgage brokers following the announcement in its 2012/13 budget forecast that it will rise by 9.2%.

In its Annual Funding Requirement published last week, the regulator revealed that for average fin­ancial advisers it is increasing broker fees from £13.12 to £14.33, for every £1,000 of brokers’ annual income in 2012/13.

The FSA says its income from  broker firms has dropped, so to make up the shortfall brokers will have to pay a larger portion of their income.

In addition to their FSA fee, brokers have to pay a Financial Services Compensation Scheme levy and a Financial Ombudsman Service levy.

Robert Sinclair, director of the Association of Mortgage Intermediaries, estimates that a small firm with a mortgage income of £50,000 and insurance income of £30,000 will pay £1,854.77 in fees in 2012/13, up from £870.44 in 2005/06.

A large firm with £2m mortgage and £1m insurance income will see its fee rise from £14,653 to £51,588.

Sinclair backs our Bring Down FSA Fees campaign and says that although it may be too late to make the FSA change its levies for 2012/13, we could prevent it from doing so again in coming years. 

He says: “Our industry has a lot of directly authorised and larger firms that will be hit. It will put up their cost of doing business.

“If the regulator keeps charging more and lenders change the way they calculate proc fees then there is only one way this can go – you can only squeeze the market so much.”

Pat Bunton, director at London & Country, says: “We, along with every other firm, has had a tough few years and seen the market contract from £360bn to £140bn. To get close to a double digit increase in fees against a backdrop of a market size that is a third of where it was is uncomfortable.”

He adds: “Most firms operating in the market have seen their income fall and have had to watch costs very tightly. It would appear the FSA is in a much more privileged position and can set its own budget and that seems to be an ever increasing budget.”

To voice your support, email Mortgage Strategy’s editor Robert Thickett at robert.thickett@centaur.co.uk, making sure you put ‘Bring Down FSA Fees’ in the subject line. 

The aim is to present a petition to the FSA to make it think again about the massive bill it has presented to an industry already struggling from the financial crisis it failed to stop.

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Comments
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  • Maurice Edgington 7th June 2012 at 12:11 pm

    I am certain I read, only a couple of weeks ago, that the FSA had told Government that it would be reducing its operating requirement. In what looked like a kind of boast. Now we know how they intend doing it by raising fees to compensate. Someone who understands accounts should take a serious look at how the FSA spends its funds. Anyway what happened to “scrapping the FSA is a priority” in 2007??? Seems they have even more power than then.

  • Arron Bardoe 6th June 2012 at 7:17 pm

    Asking advisers to support reducing fees is like asking turkeys to veto Christmas – of course we will support it. However, we must offer practical reasons.

    These might include that complaints against mortgage advice by brokers is a negligible element of the FSA’s work and, indeed, lenders seem to police much of this.

    Also, I do feel the FSA’s budget and staffing numbers should be linked to the number of adviser they regulate or level of revenues they oversee. This way, if RDR and MMR do adversely impact the market, they will accordingly need fewer bodies to do their work, as naturally non-advised sales represent a greater risk than non-advised.

    It defies logic that the FSA budget increases, but the numbers of mortgage brokers are reducing. They cannot seek more from a fewer base to ensure they do not lose staff.

  • liz 6th June 2012 at 3:12 pm

    Not to mention the funding of the FSA’s all important re-brand to hide away from the errors they made previously…

    They make me so mad. Seriously when will someone take a long hard look at them and do something about it?

  • Frank 6th June 2012 at 2:57 pm

    Whatever the FSA touches destroy:
    MCCB charge was £150.00 a year look at it now, and what have we got to show for it……end of the housing market. What about pensions, investment trusts and Bonds, ISAs etc do anybody buy one of them?. Offcourse not.. they have been told that these things are to risky and highly charged so money is better spend elsewhere……….what about an extra holiday every year?

  • Dazed & Confused 6th June 2012 at 2:52 pm

    The FSA continue to play God with Mortgage Brokers livelihoods, but it is OK folks as it is all being done in the name of TCF which is so vitally important as we all know…

    But still I guess that Mortgage Brokers are easy targets, and they can continue to bleed us dry for a good few years yet.
    I just wonder who they will pick on once the last Mortgage Broker is driven under?

  • Bobby 6th June 2012 at 1:19 pm

    And the sickest joke of all is the FSA keep on teling us all that TCF is all important. What an absolutely hilarous joke. Do these guys really take themselves seriously ?, surely they can’t. FSA Treating Customers Fairly. Stop my sides are hurting. I hope someone from the FSA reads this feedback but I doubt it and even if they did they don’t give a damn about anyone else but themselves.

  • Bobby 6th June 2012 at 12:04 pm

    The FSA commented ” the income from brokers to us has gone down and therefore we have to charge the remaining few even more “. Yes the income has gone down as you have been implicit in the ” cleansing ” of the broker from the market and have done your level best to wipe out 75% of the sector and counting. That is what you wanted FSA, EVERYBODY knows it now.

    Still you will have all your cushy jobs lined up at the FCA ready for you to finish to job to the end and it won’t be 2020 it will be 2015 at the latest. I have to say I HATE the FSA with a passion.

  • Mike 6th June 2012 at 11:56 am

    I fully support this. It is ridiculous in this time of recession that with adviser numbers dropping, the FSA increase the burden instead of reducing their costs. If it was not so serious it would be funny – in fact a sit-com made about the FSA would be funnier than Yes Minister as what they do is more stupid and unnecessary.

  • Mortgage Pauper 6th June 2012 at 10:58 am

    If it was anyone else other than the FSA, the financial press would be shouting “scandal” across their pages!! The Industry is shrinking by the minute. It’s time the FSA took stock and reduced it’s staffing and overheads accordingly, not put fees up exponentially! Three times the rate of inflation when incomes have fallen for three consecutive years?? Extreme extraction of the Michael.

    Headlines 2020: – “Last independent Broker shuts up shop. Mortgages now only available through High street banks”.
    An FSA spokesman commented, when asked by journalist if they had achieved their main regulatory goal, “it was never our intention to destroy the the Broker market, reduce the number of lenders to just five Banks and restrict consumer choice. What on earth gave you that idea? No, all we ever wanted to do was protect the conumser. TCF means a lot to us!”
    The Journo did wonder if there was anything that could wipe the inane grin of the Spokesman’s face???????

  • Graham Thompson 6th June 2012 at 10:45 am

    Although not directly affected, we do work with Brokers and IFAs to a considerable extent and do understand the pressures they are under – this does not help them.

  • Jon T 6th June 2012 at 10:21 am

    You have my support, Mortgage Strategy. Much good may it do all of us.

  • Ben Wall 6th June 2012 at 10:15 am

    despite having to present evidence to ministers recently, it does appear that the FSA are accountable to no one, can do what they like and charge what they wish. the financial education/moneymadeclear joke should be funded by the public purse, not ours.

  • Ben Wall 6th June 2012 at 10:15 am

    despite having to present evidence to ministers yesterday, it does appear that the FSA are accountable to no one and can do what they like and charge what they wish. the financial education/moneymadeclear failiure should be funded by the public purse, not ours.

  • Bill Wells 6th June 2012 at 9:41 am

    The FSA can put up fees or take its snout out of the trough – uhmm, I wonder what it will do.