Aifa questions legitimacy of FSA fees consultation
Annual consultation does not appear to affect final fee decision, Chris Hannant argues.
Chris Hannant, policy director of Association of IFAs, has raised concerns about the way the regulator consults and collects fees from intermediaries.
Commenting on the funding of the Money Advice Service, he said: “What particularly concerns me at the moment is because it is drawn purely from the financial services sector as is the FSA funding, there is not the same control on budgets that there would be, or the same scrutiny on expenditure that there would be if it was a government department.”
Whereas Mr Hannant says the Treasury keeps a “hawkish” eye on expenditure, the FSA is not held to the same level of scrutiny, and instead “writes itself a budget each year, consults and then just carries on”.
“The funding model is a broken one.”
Current policy dictates the FSA must have an annual consultation wherein it publishes its fee structure and the industry has an opportunity to respond.
However, in an interview with FTAdviser, Mr Hannant questions the validity of the consultation.
He said: “There is part of me that questions to what extent that is a real consultation, because as far as I can tell the fees are pretty much what the FSA proposes.
“If the FSA says they need X million pounds, they usually go and collect X million pounds so it is a bit of a fake consultation.
“It is not worth putting too much time into it when you know no matter how much effort you put into it the result will be the same.”