Financial Conduct Authority  

Adviser FCA fees set to jump 1.6%

Adviser FCA fees set to jump 1.6%

Advisers will see the amount they contribute towards the City watchdog rise by 1.6 per cent in 2020-21, bringing the total paid by advisers, dealers and brokers to almost £81m.

The Financial Conduct Authority proposed this morning (April 7) that A.13 firms — firms with advisory arranger, dealer and broker permissions — collectively pay £80.7m towards its running costs next year, up from £79.4m the previous year.

Overall the FCA’s budget is going up by 2 per cent to £548.5m, which the regulator said was in line with its pledge to keep spending flat in real terms.

The watchdog’s funding requirement, which includes £15m in EU withdrawal costs and £10m to support its own transformation programme, has increased 5.2 per cent to £587.6m.

But given the impact of the coronavirus crisis, the FCA has proposed a freezing of minimum fees, meaning 71 per cent of firms will see no change in the fees they pay.

Because of coronavirus the FCA is also proposing to extend the period medium and small firms have for paying fees from two months to 90 days, meaning nine out of 10 firms will have until the end of 2020 to pay their fees and levies.

Larger firms are expected to pay under the usual payment terms.

Meanwhile the Financial Ombudsman Service has asked the FCA to recover £83.9m through its general levy — an increase of £38m compared to 2019-20.

But last week the Fos shook up its funding plans in light of the coronavirus crisis, saving firms a combined £25.4m.

This means that while the levy is still going up this year, for many firms the increase will be significantly smaller than it would have been without this change.

The Money and Pensions Service has asked for £130m for 2020-21 - 21 per cent more than for last year. This includes £24.3m for money guidance in the UK, £64.6m for debt advice in England and £41.1m for pensions guidance in the UK.

Other fees include the illegal money lending levy, which is raised to recover the expenses HM Treasury incurs in providing funding for teams tackling illegal money lending. 

The Treasury has asked the FCA to raise £6.2m for this in 2020-21, up from £5.7m in 2019-20. 

Advisers will see some £4.4m returned to them in rebates, out of a £51.8m pot collected from retained penalties and fines.

The FCA is also looking to raise £2.3m this year to fund a campaign to tackle consumer harm related to the pensions and retail investment markets and will publish a separate consultation on this plan.

The watchdog will also consult on a review of authorisation application fees in a bid to simplify their structure and bring them into line with inflation. 

The FCA said: “The rates on the most common charges have not changed since our predecessor body the FSA.” 

Chairman Charles Randall said: “The coronavirus has added to the challenges already facing the FCA and it is more important than ever that we can deliver our objectives this year.