Sense network is one of the advice firms who have witnessed a drop in Financial Conduct Authority levies due to the restructuring of how fees are collected the following year, although it admits this is an anomaly and fees will rise again next year.
In April, the FCA published its consultation paper on regulatory fees and levies rates proposals which revealed that it had changed the levy charge from the number of approved persons to annual income.
The FCA said those in the A13 fee block would see a drop of 1.2 per cent in fees for 2013/14 whereas those in the A12 fee block would see a rise of 1.9 per cent. The new calculations came into force in July.
Steve Young, commercial director at Sense network, said that due to the new calculations based on turnover, Sense’s FCA regulatory bill will be 35 per cent less.
He said: “Previously most FSA bills were based on headcount, so working out a rate per individual. At 31 December the number of people on the register indicated the bill but that has now changed.
“It has changed to turnover; turnover income from the firms in the block is calculated and then this is divided by the exact turnover.
“We are growing very quickly and the latest FCA fee is based on a previous time when our turnover wasn’t very big.
However, he added that the lower fees this year are “just a statistical thing”.
“While our bill is significantly less, next year it will be higher as the bill will come in around April time and will be based on this year’s turnover which will be higher due to growth and also the change in calculation.
“Our lower bill is purely due to the way it is calculated. At first we didn’t realise it would have a massive effect. Over time it will sort itself out.”
Last month, Personal Touch Financial Services announced it will subsidise its members’ regulatory costs by approximately 12 per cent of the total regulatory bill, amounting to around £200,000.
Personal Touch 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 FCA.
Last month the FCA’s 104-page regulatory fees and levies consultation paper revealed almost 7,000 advice firms could see a drop in FCA levies if a proposed restructuring of how fees are collected is approved by the regulator.
Proposing a merger of the fee blocks, the paper said the current system was “counter intuitive” with some firms taking on the additional permission of holding money to ensure a lower fee. The consultation’s deadline for submissions is 6 January next year.
