Personal Touch Financial Services will subsidise its members’ regulatory costs by approximately 12 per cent of the total regulatory bill, amounting to around £200,000.
Personal Touch Financial Services has contacted its member firms giving advance notice of its intention to subsidise their regulatory fees for 2014, following increases in regulatory costs announced by the Financial Conduct Authority.
The FCA previously announced adviser firms will be charged fees that are 13 per cent higher than in 2012/13, compared to the previous year, under the proposed guidelines.
Personal Touch also said it will be absorbing the increase for the second half of 2013. The overall effect of the increased support is to keep the total increase in cost of membership, assuming identical business levels and mix, to under 5 per cent for the vast majority of firms.
In September Personal Touch announced a freeze of its own network member fees and more recently the introduction of twice-weekly commission payments; both measures designed to reward members for their hard work and commitment.
David Carrington, marketing director for Personal Touch, said: “We have seen significant increases in our regulatory costs, which together with our PI premiums brings our total regulatory charges to over £1.6m.
“Obviously we treat these costs as disbursements to members and need to pass them on. But given our commitment to support members and equally reward them for their particularly hard work and loyalty in the past year, the board have taken the decision to subsidise some of the fee increase for 2014 using additional revenue generated by stronger mortgage volumes and other cost and efficiency savings we are achieving across the business.”
In its letters to members Personal Touch also announced that despite difficult market conditions for many, the network had been successful in renewing its professional indemnity insurance on the same terms and through the same brokers as the previous year.
Mr Carrington added: “Securing competitive PI cover is an important reassurance for members in a tough market and is a reflection on the quality of advice that we provide. Simultaneously, we are also introducing direct supervision at no additional charge and have introduced a fee waiver for new advisers recruited into our member firms.
“Taken together with our regulatory fee subsidy we believe this admirably demonstrates our commitment to be transparent and support members and equally show our thanks to those who have worked so hard this year, particularly enabling the positive growth in mortgage business above target.”
Last week, a mortgage broker told FTAdviser that he was refused PI cover by 16 separate insurers after making his first ever claim.
