FCA's new flat fee a 'shock' to networks

Robert Sinclair, chief executive of the Association of Mortgage Intermediaries, said it was disappointing that the FCA was increasing the cost burden on mortgage firms at a time of falling revenues. 

Sinclair said: “I am particularly concerned that having found issues in controls over appointed representatives in the investments and general insurance space, a broad brush approach has been applied without consultation.

“To add a cost of £250 for each AR to a mortgage network without evidence of harm seems unfair. 

“AMI will be challenging this rushed change to the rules and the cost to firms robustly. For what is another significant addition of new fee classes and costs, a five week response time leaves us very limited time to consult with our membership.”

Rob Clifford, chief executive of Stonebridge, said the system again resembled one in which good firms foot the bill for wrongdoers in the profession.

“A system in which the good pay the costs of the bad is deeply unsatisfactory as is one where firms not even involved in the sectors where poor practice takes place, end up having to ‘bail out’ those where it does,” Clifford said.

“In this regard, the FCA talk about networks not controlling their ARs, but our understanding is this relates to investment and GI firms, not mortgage and protection. 

“We fully support AMI’s position in pushing back against these increases and we firmly believe this to be an unfair approach, increasing charges to mortgage advisers at a time when revenue is falling.”

amy.austin@ft.com, additional reporting by chloe.cheung@ft.com

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