RegulationAug 27 2015

FCA levies are a fair deal as regulator is doing more – Bovill

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FCA levies are a fair deal as regulator is doing more – Bovill

Recent increases in FCA levies were a result of the fees being artificially low to begin with, Mark Spiers of Bovill has claimed.

The head of wealth management at the regulatory consultancy firm said advisers had benefitted from low fees in recent years, and were now being hit by increasing demands on the FCA’s resources.

Mr Spiers said: “For the IFA market there has been some consternation over the increases, but I think they get a fair deal.

“The cost of policing the industry increases over time from inflationary pressures, but the amount of policing has been going up as well. The FCA is doing more, and that puts up costs.”

He added that while the costs of regulation and compliance do appear to be increasing, this is only anecdotal.

Mr Spiers’ comments came as Apfa launched its second yearly survey into the cost of regulation.

Chris Hannant, director general of Apfa, said: “Last year’s survey showed the average adviser spends a significant amount of revenue on complying with the multitude of rules and regulations at both the UK and EU levels.

“This cost burden then gets passed on to clients in the form of higher fees, meaning that financial advice is increasingly becoming the sole preserve of the wealthy.

“With HM Treasury and the FCA seemingly in ‘listening mode’ with the financial advice market review, we strongly urge the industry to get involved.”

An FCA spokesman said: “The FCA has a broad, growing and challenging remit. We are always conscious of the cost of regulation, which is why we ensure our requirements are proportionate.

“For example, the minimum fee, which is paid by 38 per cent of all regulated firms, had been frozen for four years before this year’s increase.”

Adviser view

Alan Turton, managing director of Leicester-based Rowley Turton, said: “I do not think the actual FCA fee element is much of an issue – it is the FSCS levy which has gone up by crazy amounts.

“The problem is that by levying in the way they do they are not using the fines against the cost of regulation.”

Levy for advisory arrangers, dealers and brokers since FCA inception
YearLevy (£m)Increase/decrease
2015/1674.910.2%
2014/1568-18.7%
2013/1483.6