Advisers are set to shoulder the biggest burden for regulatory costs this year, as the Financial Conduct Authority’s budget swells to over half a billion pounds.
Taking over the regulation of consumer credit has pushed the FCA’s total budget for 2016/17 to £519.3m, an increase of 7.8 per cent on last year, according to its fees and levies consultation, published today (5 April) alongside its plans for the year ahead.
Cutting out the consumer credit bill, the total annual review bill is £481.6m.
But the figure of most interest to investment, mortgage and general insurance intermediaries is 28.4 per cent - the amount of the levy they will have to pay, while fund managers and operators of schemes are expected to pay just 10.5 per cent.
Financial services firms will be forced to pay £469.8m of the total regulatory costs, a £31.8m increase on last year’s figure of £438m, equating to a 7.2 per cent rise.
Projected staff costs at the FCA have also increased by over £36m from last year’s figure of £279.9m, to £316.8m during the year ahead.
Additionally, the regulator has announced a 1.6 per cent decrease in its ongoing regulatory activities, due to decreased costs at an underlying level of £7.6m, or 1.6 per cent.
It is applying the decrease evenly across fee blocks, with the exception of deposit acceptors, home finance providers and administrators, portfolio managers and managers of investment funds and pension schemes.
As such, advisory arrangers, dealers or brokers are set to pay £73.7m, against last year’s figure of £74.9m, a 1.6 per cent decrease.
Deposit acceptors will see their fees increase of 9 per cent, whilst home finance providers and administrators will swallow an increase of 7.1 per cent.
However, portfolio managers are set for a decrease of 5.1 per cent, while depositaries of investment funds and operators of collective investment schemes or pension schemes are set for a decrease of 9.5 per cent.
With regard to pensions guidance costs, there is a proposed decrease of 48.3 per cent due to a reduction in planned costs across 2016/2017.
Operating costs at the FCA
| Operating costs (ORA) | 2015/16 £m | 2016/17 £m |
| Staff costs | 279.9 | 316.8 |
| IS costs | 95.2 | 97.2 |
| Depreciation | 47.3 | 39.3 |
Accommodation and office services | 30.5 | 31.5 |
| Enforcement case costs | 10.7 | 8.3 |
| Professional fees | 17.6 | 16.2 |
| Training, recruitment, travel | 16.2 | 12.7 |
| Printing and publications | 3.9 | 4.2 |
| Other costs | 3.1 | 1.8 |
| Sundry income | (25.6) | (25.2) |
| Total ORA | 479.0 | 502.9 |
ruth.gillbe@ft.com
