Advisers' FCA fees to fall in 2019/20

Advisers' FCA fees to fall in 2019/20

Advisers will see the amount they contribute towards the Financial Conduct Authority fall in 2019/20 despite the regulator seeing its costs increase.

The regulator is proposing that advisers collectively pay £79.4m towards its running costs next year, down 1.1 per cent from this year.

Overall, the FCA's budget is going up by 2 per cent to £537.7m, which the regulator said meets its commitment to keep its spending flat in real terms.

The FCA's funding requirement, which includes additional costs relating to the UK's withdrawal from the EU and costs needed to cover changes to its responsibilities, such as the takeover of claims management company regulation, will be £558.5m - an increase of 2.7 per cent.

The regulator said it had a policy of evenly distributing rises and falls in its funding requirement, but had made several exceptions this year, meaning advisers will be spared some of the cost.

For example the costs of scope changes - which include the regulation of CMCs, which the FCA took responsibility for this month - is not being shouldered by advisers and is instead largely falling on CMCs, which are collectively paying £7.1m in their first year of being subject to FCA regulation.

Advisers have also been spared paying for the cost of EU withdrawal, which has pushed up the FCA's costs by £5m and which is falling on banks, insurers and fund managers since they are most likely to be affected.

Banks will see the largest increase to their FCA levy, with their collective bill rising by 4.3 per cent to £74.6m.

Meanwhile the Financial Ombudsman Service has asked the FCA to recover £44.5m for 2019/20 - almost double the amount for the previous year when it asked for £24.5m.

This increase has been largely driven by the need for the Fos to scale up to meet both increasing demand and "a change in product mix".

The largest part of this - 39 per cent - will be paid for by banks and mortgage lenders, and advisers will collectively only pay 1.4 per cent - or £623,000.