Parliament has called on the government to take steps towards demands for a real-term freeze in Financial Conduct Authority regulatory fees for a minimum of two years to ensure investors are better able to acquire access to professional financial advice.
Additionally, the house noted in an early day motion that the recent changes to pension legislation have meant consumer access to clear and affordable financial advice has become increasingly more important.
It further noted that recent research by the Association of Professional Financial Advisers, demonstrated that on average an adviser firm spends 12 per cent of its revenue on regulation.
Apfa’s research found that, in 2013, smaller firms spent on average 12 per cent of their income on direct and indirect regulatory costs - 3 per cent on direct fees and levies and 9 per cent on indirect costs.
This meant that in total the sector spent an estimated £460m on regulation, with the average client paying approximately £170 per year towards the cost of Financial Conduct Authority rules and requirements.
In March 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 [Financial Conduct Authority] can be held to account”.
The primary sponsor of the early day motion made today was Alan Meale, and other sponsors were Mark Durkan and Peter Bottomley.
The motion comes after HM Treasury and the FCA published an input paper on Monday (12 October) for the Financial Advice Market Review.
The paper acknowledged that it is no longer possible to advise certain clients and be profitable, with the FCA noting the impact of regulatory fees on the cost of providing advice today.
ruth.gillbe@ft.com
