Robert Sinclair, chief executive of the Association of Mortgage Intermediaries, has revealed his plans to tell the Treasury Select Committee in the next parliament the FCA is “out of control when it comes to costs” and to make an election issue out of spiralling costs.
In the latest FTAdviser video interview, Mr Sinclair said an 8.5 per cent increase in regulatory fees across the board at a time when inflation is running at 0 per cent seems a “little excessive”.
For most advisers the increase was higher at 10 per cent, which the FCA said was in part due to measures the previous year to reduce costs to correct an anaomoly affecting those not holding client money. This was the largest rise of any fee block this year.
The regulator revealed that advisers are to pay an extra £6.9m in FCA fees. A £74.9m levy has been proposed by the regulator for advisers as part of its consultation paper on funding requirements for 2015/2016, up from £68m last year.
Most ‘A’ fee-paying blocks will have to pay between 8.2 per cent and 8.5 per cent more in the coming financial year, which the FCA said was due to, in part, a new £27m allocation towards ongoing regulatory activity.
Mr Sinclair told FTAdviser’s Emma Ann Hughes he wants to see the Treasury Select Committee after the election call in the FCA’s senior management and demand an explanation for their spiralling costs.
As for the shorter term, he added: “We will clearly want to engage with some MPs in this election process because we want to make it clear to those standing for election that we think the FCA is out of line in terms of this particular proposal.”
Mr Sinclair added that Ami want to “engage directly” with the FCA to see if there is any room for them to change what they are planning to do.
“I think they do have to stand back and have a think because any organisation that is in this kind of cost growth has to come up with a better explanation than they have than the rationale in the document they have published.
“There is nothing in there that justifies this kind of increase across the board.
“Clearly we have an organisation that appears to be out of control when it comes to costs. That cannot be acceptable. I think their board has to answer some serious questions about why they sanctioned this.”
He added Ami would campaign through trade publications to get the message out that regulatory fee hikes were unacceptable.
His comments comes on the day FTAdviser sister title Financial Adviser reported on intervention from the heads of three of the leading adviser trade bodies over the burden being placed on advisers as a direct result of fees at a time when there are concerns over access to advice.
Lord Deben, the former Cabinet minister and chairman of the Association of Professional Financial Advisers, said this was unwise because it was becoming harder for all but the wealthy to access financial advice.
He said: “Regulatory costs already account for around 15 per cent of advice to individuals.
“This together with the post-RDR fall in adviser numbers means that the ability of all bar the wealthy to obtain professional financial help is severely restricted, at a time where significant changes to the pensions and savings landscape mean access to affordable financial advice is increasingly vital.”
emma.hughes@ft.com
