Financial advisers are set to see almost a 20 per cent reduction in the next financial year’s fees and levies to the Financial Conduct Authority.
Most adviser falls will now fall under the fee-block A13, the FCA confirmed, as it has proposed deleting fee-block A12 and putting all advisers, arrangers, dealers and brokers regardless of whether they are holding client money, assets or both in A13.
The FCA’s Regulated fees and levies: Rates proposals 2014 to 2015 consultation paper, published today (31 March), revealed those in the A13 fee-block will see a 18.7 per cent drop in the fees and levies payable in the next 2014 to 2015 financial year to £68m from the current £83.6m.
In October 2013, the FCA revealed plans to re-organise the categories by which its levies are determined, which could result in almost 7,000 advice firms enjoying a drop in how much they had to pay.
The FCA has proposed that financial advisers who do not hold and control client money/assets will pay £0.114 per £1,000 of annual income subject to a minimum fee of £45.
Those financial advisers who do hold and control client money/assets will pay £0.158 per £1000 of annual income, subject to a minimum fee of £45.
Furthermore, the FCA plans to spend £452m in 2014 to 2015, an increase of 1.4 per cent from its previous budget, and is driven by its new “competition team to deliver our competition objective”.
The total annual funding requirement for 2014 to 2015 is £446.4m, an increase of 3.3 per cent from 2013 to 2014.
This includes the recovery of its operating costs (ORA) budget and the £4.4m funding required for the recovery of scope change costs in relation to the implementation of the Alternative Investment Fund Managers Directive.
Offsetting these costs is a £10m reduction as a result of budget under-spend in 2013 to 2014, the FCA said.
The Financial Ombudsman Scheme has requested the FCA raise £23.3m through the general levy, which is the same amount it forecast to collect in 2013 to 2014.
The FCA said this was because complaint trends, excluding payment protection insurance, have remained stable.
The FCA is also consulting on the Money Advice Service’s total funding requirement of £81.1m, for 2014 to 2015.
The two separate Mas levies proposed to raise are £43m (£43.8m in 2013 to 2014) for delivering money advice, and £38.1m (£34.5m in 2013 to 2014) for the coordination and provision of debt advice.
Last week, Apfa launched an adviser-led survey to establish a ‘cost of regulation’ index for the sector.
Apfa says the index will allow the trade body to monitor the annual direct and indirect costs of regulation and compliance.
Apfa claims it will be used a benchmark against “which the FCA can be held to account”.
