The Financial Conduct Authority has proposed to hike its annual funding requirement (AFR) for advisers by 5.2 per cent, from £82.3mn to £86.5mn.
The regulator said in its fee proposal document published today (April 7) that its overall AFR is estimated to go up by £26.4mn in 2022/23, an increase of 4.3 per cent from £613.7mn in 2021/22 figure to £640.1mn.
The FCA put this change in funding requirement down to a mixture of ongoing regulatory activities (£611.3mn) - i.e the baseline cost of running the FCA, as well as new responsibilities (£3mn), “scope change[s]” (£10.4mn), and National Insurance rate increases (£3.1mn).
The regulator also justified the advice firm fee change, suggesting that between 2021/22 and 2022/23 the number of advice firms under its watch will decrease from 12,301 to 11,901.
The FCA will apply penalty rebates to its funding requirements, currently estimated at £49.1mn overall and £4.2mn for the adviser fee block A.13. It said the final figure will be updated when the FCA finalises the fee rates in June.
Meanwhile the Financial Ombudsman Service's budget for 2022/23 will go up to £291.7mn, from £260.2mn currently, as approved by the FCA board in March 2022.
The levy on advice firms as a percentage of the Fos’ total levy will be 2.34 per cent, up from 1.9 per cent this year.
As for the Money and Pensions Service levy, made up of money guidance, pension guidance and debt counselling, advice firms will pay £100,000 less for the money guidance allocation, falling from £1.8mn to £1.7mn in 2022/23 - a movement of 6 per cent.
But they will pay £5.7mn for pension guidance, up from £2.4mn in 2021/22.
The Department for Work and Pensions told the FCA that the total amount it must collect for Maps in 2022/23 is £159.4mn.
The FCA said all these fees will be finalised in June pending its consultation.
ruby.hinchliffe@ft.com
