Network blames regulatory levy on member fee hike

Network blames regulatory levy on member fee hike

The Personal Touch network has blamed a member fee hike on the impact of Financial Services Compensation Scheme and Financial Conduct Authority charges.

A letter to firms was sent out last week informing them from October the network will increase fees by £150 for each adviser authorised for investments, pensions and mortgages.

Firms will have to pay £114 more for each investment and pension adviser they employ, while for each mortgage-only adviser, they will pay an extra £36.

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David Carrington, sales and marketing director at Personal Touch, explained the increase was due to the £20m interim FSCS levy on life and pension advisers, as well as increasing FCA fees.

In April, the FSCS revealed that pension and life intermediaries would be stung with a maximum £100m levy, a 75 per cent increase than that which was expected from the levy indication earlier this year and three times last year’s bill.

In June, an FCA policy statement confirmed its planned 10.2 per cent fee hike for advisers over 2015 to 2016, with firms in the A13 block paying £74.9m, up from £68m in 2014 to 2015.

Mr Carrington told FTAdviser the increase only relates to the regulatory fees and there is no change in actual network fees, “in fact, as you may recall we reduced our fees for over 80 per cent of members earlier this year when we moved to a quality based model”.

However, he complained their FCA fees increased by 38 per cent in 2015 compared with last year, with the bulk of that coming from the FSCS levy.

“We were actually pretty pleased with our PI renewal after all the horror stories we had heard and a 12 per cent increase is a lot less than what we are led to believe is being imposed elsewhere.”

The letter to members stated they “believe strongly that the current method of allocation of FSCS levy is flawed” and the network has raised concerns directly with the regulator on a number of occasions recently.

“It’s important to note that Personal Touch receive no monetary gain from your regulatory fees as we simply pass on the charges imposed by the regulator.”

An annual review of membership fees will be completed later this year.