Financial Conduct Authority  

Adviser FCA fees to jump 1.5% to £82m

Adviser FCA fees to jump 1.5% to £82m

Advisers will see the amount they contribute towards the City watchdog rise by 1.5 per cent in 2021-22, bringing the total paid by advisers, dealers and brokers to just over £82m.

The Financial Conduct Authority proposed this afternoon (April 20) that firms in the A.13 fee block - firms with advisory arranger, dealer and broker permissions - collectively pay £82.3m towards its running costs next year, up from £81.1m the previous year.

Advisers will see £4.3m returned to them in rebates, out of a £50.4m pot collected from retained penalties and fines.

Overall the FCA’s budget is going up by 4.5 per cent to £616.5m, which the regulator said was to meet challenges in the year ahead.

But it also said it has recognised the challenges facing the financial services industry and the increases in the levies under the statutory Financial Services Compensation Scheme (FSCS).

The regulator said in real terms it has maintained a broadly flat base ongoing regulatory activities (ORA) budget with a 2 per cent increase to £559.5m. 

Due to Covid-19, the FCA has proposed not to increase minimum fees by the 2 per cent increase in its 2021/22 base ORA budget. It had also kept minimum fees unchanged the previous year.

The FCA said this would help protect the smallest firms from the impact of Covid-19. 

The regulator is also proposing to continue to extend the time medium and small firms have for paying fees from two months to 90 days.

This means that 88 per cent of firms will have until the end of 2021 to pay their fees and levies. Larger firms will be expected to pay their fees under the usual payment terms.

Meanwhile, the Financial Ombudsman Service has asked the FCA to recover £96m through its general levy — an increase of £12m (14 per cent) compared to 2020-21, when it stood at £84m.

The FCA said this levy is around 9 per cent lower than the £106m the Fos had proposed in its consultation.

The Fos has also increased its case fee to £750 - an increase of £100.

In addition, the Department for Work and Pensions has told the FCA to collect £149.2m for the Money and Pensions Service in 2021/22.

This includes £23m for money guidance in the UK, £94.6m for debt advice in England and £31.6m for pensions guidance in the UK.

Other fees include the illegal money lending levy, which is raised to recover the expenses HM Treasury incurs in providing funding for teams tackling illegal money lending. 

The Treasury has asked the FCA to raise £6.5m for this in 2021-22, up from £6.2m in 2020-21. 

The FCA asked firms to respond to the proposed changes by May 25 this year.

amy.austin@ft.com

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