Financial advisers have been receiving their regulatory fee invoices and the increases have been so high for some firms they are fuming.
Some have reported increases of 61 per cent, some 85 per cent and others even higher - all this without having committed any regulatory failure over the past financial year.
We applaud what the regulator does and what the compensation scheme does to help protect and repay consumers who have been treated unfairly. It is important to have a body that oversees the sector, improves professionalism, deters bad behaviour and upholds the rights of consumers.
But it is time to rethink how the regulator and the Financial Services Compensation Scheme are funded.
Financial Adviser is launching a concerted campaign of letter writing to the Treasury, government and the Financial Conduct Authority calling for a review of the level of fee increases on regulated firms.
Financial Adviser has already highlighted the lack of appetite at the FCA for reviewing its fee structure but with a new chief executive coming into the top position at the City watchdog, now could be a good time for the industry to evidence the strength of feeling and the concerns over poorer consumer outcomes as a result of punitive regulatory fees on hard-working advisers.
On top of this, the ever-rising premiums on professional indemnity insurance makes it harder for directly authorised firms to get the cover they need to continue operating in financial services.
Over the coming months we will be shaping our editorial to promote this to the regulator and to encourage the complaints commissioner to also urge the FCA into reconsidering fee increases.
We will also be speaking with PI companies and lobbying for more choice and lower premium increases on PI cover for financial advisers who have had few to no complaints in the previous financial year.
We will also be publishing your letters, comments and opinion pieces on how the fee increases are affecting your businesses and, if increases continue unchecked, how this could lead to a widening of the advice gap in the UK.
Here are some of the comments we have already seen on Twitter and from correspondence with Financial Adviser.
Nick Bamford, executive director of Informed Choice, said: "Regulatory fee invoice received today. An increase of 61.3 per cent over last year. I bet the regulator continues to lecture us about the level of fees charged to clients. (some of the language I wanted to use in this tweet has been censored)."
He continued: "Financial Services Compensation Scheme levy increases over past 10 years +53 per cent, -35 per cent, -22 per cent, +35 per cent, +19 per cent, -16 per cent, -30 per cent, +24 per cent, +28 per cent, +58 per cent.
"Try budgeting for this! PI premiums and FSCS levies are signs of regulatory failure."
Financial adviser Capital Hill also tweeted: "Everyone we need to send letters about this. If we all do this we might at least get an "explanation" why the fees have increased."
Philip Hanley, founder of Philip James Financial Services, commented: "Huge increases in @TheFCA [fees]. Mine up 85 per cent; others I've spoken to, by more. Perhaps they should survey us again now we've all had our bills."
Alongside engaging with our readers and co-ordinating a letter-writing campaign to those in charge at the FCA, we will encourage and commit to speaking with your local MPs on the matter, to raise these questions with the Prime Minister and get the issue on the table.
To start this off, I will write to my own local MP to raise this issue with him, to flag the potential for driving good advisers out of the industry while augmenting the already too-wide advice gap.
I would encourage you to do the same, and feel free to copy Financial Adviser into your correspondence.
Together I hope we will achieve a fairer way of funding the important and valuable work the FCA does to protect consumers and keep the market competitive and innovative, without driving the 'small guys' out of the market.
Simoney Kyriakou, editor, Financial Adviser
simoney.kyriakou@ft.com
