Your IndustryAug 19 2014

High cost of doing business is crippling the industry

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Some of this is as a result of the industry changes brought about by the RDR, but a huge chunk of a firm’s overheads is also down to the FSCS levy.

With regulatory fees rising by more than 30 per cent for some firms, and the threat of yet a higher levy this year, there will be many who will be doubting their ability to survive in the industry.

The bottom line is that the levy is an indirect tax on the industry and the cost of regulation has become disproportionate to the aims and achievements of the regulator.

We know that there has been bad practice in the past. But what is happening now is that the miscreants have left the industry and those of us who are left are shouldering the cost of mistakes made by those who have already baled out.

The FCA may have achieved greater fairness for the client, but fairness for the IFA seems to have been thrown out in the process.

The FCA may have achieved greater fairness for the client, but fairness for the IFA seems to have been thrown out in the process

There is another sword of Damocles hanging over the industry: the prospect of stringent capital-adequacy requirements.

These could prove to be the last straw for many firms that have survived the increased cost of regulation. Those of us who have invested heavily in our professionalism are hoping that common sense will prevail at the FCA when the capital-adequacy requirements are finalised.

Carl Lamb is managing director at Almary Green