Financial Conduct Authority  

Advisers ‘pleasantly surprised’ at modest FCA fee increase

Advisers ‘pleasantly surprised’ at modest FCA fee increase

Financial Conduct Authority fees have risen once again this year, but advisers have said they are relieved that it is only a marginal increase and broadly in line with inflation.

The amount advisers are expected to contribute towards the City watchdog is to rise by 1.5 per cent to £82.3m next year, while overall, the FCA’s budget is going up by 4.5 per cent to £616.5m.

Advisers said the figures were a relief compared to the ever increasing costs of the Financial Services Compensation Scheme levy.

Tim Morris, independent financial adviser at Russell & Co, said it was “refreshing” that the fee wasn’t being hiked by a large amount and was “broadly in line with inflation”. 

He also said it was positive that it appeared to take into account that financial advice firms have had a difficult time in the past 12 months. 

“They even seem to have partially protected advisers from the ever increasing black hole that is the Fos”, he added.

Victor Sacks, director at VS Associates, agreed that fees “are only going to go one way”, so was pleased to see a small increase.

He added: “Sadly, it will be another year of collecting fees from those of us that keep their house in order and do right by our clients as opposed to those who do not and make headlines for the wrong reasons.”

Meanwhile, Simon Harrington, senior policy adviser – public policy at trade body Pimfa, said given the circumstances it was welcome that the FCA has “sought to take an proportionate approach to fees”. 

Harrington said going forward, Pimfa hopes focus is placed on whether or not these firms are receiving value for money and are given a “supervisory system which is fit for purpose, and an agile regulator who can take advantage of many of the opportunities presented to this sector following our exit from the European Union.”

His concerns were echoed by Darren Cooke, chartered financial planner at Red Circle Financial Planning, who said it was hard to find the benefit behind the FCA fees "with the continued failure of the FCA to regulate various parts of the investment industry particularly mini-bonds, LCF being the most famous example but there are many others, and continually failing to act even when told of scams and illegal practices. 

“Meanwhile issuing pointless surveys to advice firms, spending money on changing the FCA register, actually making it worse than it was before, and on changing our reporting systems, again with no discernible difference or improvement."

He added: “We have no choice but to pay up, we cannot refuse, there is no alternative provider we can use instead. We have to pay whatever bill they send us or close down our businesses.”

FSCS levy

But others said the FCA fees were incomparable to the FSCS levy which has continued to rocket over past years.

Martin Bamford, head of client education at Surrey-based advice firm Informed Choice, said: “As a regulated firm, our annual levy towards the running costs of the FCA pales into insignificance relative to FSCS funding costs, for which the FCA is indirectly responsible.