The FCA should shut down unregulated businesses and replace the FSCS levy with a product levy, according to advisers subject to “ridiculous” costs.
Simon Webster, managing director of Kent-based advisory firm Facts & Figures, and Martin Bamford, managing director and chartered financial planner at Surrey-based Informed Choice, said they were increasingly concerned about high regulatory fees and levies.
Mr Bamford’s firm has paid £20,000 to £30,000 a year towards the FSCS, plus additional interim levies, such as Mas and Pension Wise fees. He said: “These levies hit us with little warning and no time to pay them. They are completely out of our control. We are paying for unregulated trading, penny share traders and forex traders.”
The firm pays professional indemnity fees of £12,000 to £14,000 a year and has to set aside £30,000 to £40,000 for capital adequacy. Mr Bamford added that the past few years had been “horrific” for the business, saying: “If the FCA were regulating the market effectively we would not be paying such high compensation.”
Mr Webster agreed, saying that last year he had paid a “ridiculous” £15,000 to the FCA, and suggested replacing the FSCS levy with a product levy. He said: “Nothing has been done about it for years. The FCA is an unaccountable monolith that feeds itself on the sweat of my brow.”
Right to reply
An FCA spokesman said: “We are always conscious of the cost of regulation, which is why we ensure our requirements are proportionate. For example, the minimum fee, which is paid by 38 per cent of all regulated firms, had been frozen for four years before this year’s increase.
“We have committed to a review of the FSCS levy in 2016.”
