Financial Conduct Authority  

FCA confirms fee cut for advisers

FCA confirms fee cut for advisers

Financial advisers will pay less in regulatory fees to the Financial Conduct Authority in the coming year, despite the regulator’s funding requirement rising 2.7 per cent.

In a policy statement published today (July 1), the FCA confirmed advisers would pay 1.1 per cent less than they did in 2018-19. 

The adviser contribution to the annual funding requirement (AFR) for 2019-20 comes to £79.4m, down from the £80.3m collected in the previous year. 

According to the FCA, the increase in the overall AFR, which stands at £558.5m, was a reflection of the additional costs as a result of changes in the "regulatory scope" in areas such as consumer credit, claims management firms, and the Office for Professional Body Anti-Money Laundering Supervision (OPBAS). 

However, it added that it had a policy of evenly distributing the levy.

In its previous statement out in April it had said: "We are committed to delivering a base budget that is flat in real terms.

"Looking back over the past four years we have met that commitment [with] the annual movement in our base budget being either in line with inflation or below it. 

"We continue to be committed to operating economically, efficiently and effectively to deliver value for money."

General and life insurers were among those that have seen the largest increase, at 3.3 per cent and 3.4 per cent respectively, while the levy imposed on mortgage advisers rose 4 per cent for 2019-20, from £16.9m to £17.6m.

A mortgage trade body had questioned the dramatic rise in the fees facing the industry during the consultation period, suggesting that it had not been adequately explained. 

The FCA stated, however, that the year-on-year change was higher because last year it rebated part of the scope change costs of the Mortgage Credit Derivative (MCD) and this has not been repeated. 

The regulator added: "We spread the recovery of the MCD scoped change costs over several years and its impact of increasing fees for mortgage providers and intermediaries was for that period only."