The cost of implementing the Financial Conduct Authority’s ban on cash rebates could cost the industry £16m more than previously estimated, the regulator has revealed.
In its platform paper published today, the FCA admitted its current estimated cost to the industry is between £33m and £67.2m initially and between £8.3m and £14.9m on an ongoing basis. These estimates surpass those found in the previous consultation paper by £16m and £4m respectively.
Implementing a ban on cash rebates could cost platform providers specifically up to almost £62m initially and £14m ongoing.
The FCA said: “We consider that these revised costs are likely to be on the high side of estimates.
“Indeed one of the largest existing non-advised platforms has informed us that the compliance costs estimated for the typical non-advised platform were significantly higher than they anticipated for their circumstance.”
Although the regulator does not accept that the new policy will affect competition, it did say it would consult on the outcomes of these higher costs.
It is also to consult separately on introducing a similar rebate ban for the discretionary management and self-invested pensions sectors, among others.
