Simoney Kyriakou  

Let’s talk about fees

Simoney Kyriakou

Simoney Kyriakou

“What we’ve got here is failure to communicate. Some men you just can’t reach.”

So, you get what we saw last week and the one before: letter after letter arriving at advisers’ offices, demanding eye-watering levy increases. 

It is the way the Financial Conduct Authority wants it, and it gets it. 

But in the middle of a pandemic, when the government is keen to impress upon us that it is serving the needs of small businesses, and helping them financially through this mazy road to recovery, the lack of constructive communication between regulators and regulated is telling.

True, the large organisations and trade bodies do meet frequently with the FCA and others to suggest new ways of raising fees and levies.

But when FCA chairman, Charles Randell, himself states the levy imposed on advisers to pay the price for Financial Services Compensation Scheme payouts will rise, pandemic or no pandemic, it is of no help to advisers facing up to 120 per cent levy increases. This isn’t communication: it’s commandment.

To quote Mr Randell in his June speech: "The FSCS compensation costs levy is already at an unacceptable level; and I am sorry to say it is likely to increase, as some firms will fail during this crisis."

“Some firms will fail” – but will this be because of Covid-19 or because of the pincer move of rising regulatory fees and professional indemnity insurance premium hikes?

“Some firms will fail” – not ‘have failed’. So is this price rise purely preemptive? That sounds an awful lot like screaming just in case you stub your toe.

And even though he acknowledged funding needed to be reviewed, Mr Randell warned changes to reduce the cost of regulation would require significant investment and take a number of years to implement.

So, the FCA is not considering any review to the way in which regulators are funded, which is why Financial Adviser urges you to write to your MPs and to the Treasury to put a review of the funding model onto the agenda.

If it is not, the advice gap will widen and social divisions will gape even further. Everyone must collaborate to help keep fees fair.