FCA hits advisers with an extra £6.9m levy in 2015/16

FCA hits advisers with an extra £6.9m levy in 2015/16

Advisers will have to pay an extra £6.9m towards the FCA under the regulator’s proposals for 2015/16.

The City watchdog is asking advisers to pay a total of £74.9m towards its running costs, up from £68m last year.

The FCA’s annual funding requirement has gone up from £446.4m to £481.6m since last year.

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According to the FCA this is because an additional £27m is needed for “ongoing regulatory activity” including increased staff costs and upgrades to the regulator’s information systems.

Martin Wheatley, chief executive of the FCA, said: “These proposals seek to share the cost of being regulated and ensure the FCA has the right resources in place to deliver appropriate protection for consumers and make markets work well.”

From 2015/16 financial advisers will also have to start contributing towards 12 per cent of the £39m cost of providing the Pension Wise guidance service through a levy.

Those advisers who have incomes below £100,000 will not pay the Pension Wise levy.

Last year adviser fees across the board fell by nearly 20 per cent after the FCA corrected an “anomaly” that affected advisers who did not hold client money, resulting in the deletion of an entire fee block.

But Robert Sinclair, chief executive of the AMI, called the rises a “travesty” and expressed doubt about whether the increase would really be across the board.

He said: “For the small broker who has paid the minimum fee of £1,000 for a number of years, this is to be increased to £1,084 and they will also have to pay a new levy to undertake consumer buy-to-let totalling £350 to include their Fos levy.”

Brokers have yet to see clarity on whether or not they need a consumer credit permission to talk about some historic loans and mortgages raised for commercial purposes, he said, adding: “All of this means that the small broker will see their FCA fees rise by over 50 per cent a year.”

Adviser view

Chris Hannant, director general of Apfa, said: “Apfa’s 2014 report on regulatory costs indicates that direct and indirect regulatory costs represent around 15 per cent of the cost of financial advice.

“This is a significant cost to the consumer and reduces access to advice at a time that government reforms to pensions make affordable financial advice ever more important.”