Stephen Willis, chartered financial planner at Piercefield Oliver, told Conservative MP for Cheltenham, Alex Chalk, he would “shelve plans to expand” after receiving this year’s bill from the City watchdog.
He wrote: “Ours is a small business and the direct consequence of this FCA fee hike is that we will probably delay bringing back a furloughed worker and shelve plans to expand with an additional member of staff.
“We will also be looking to recoup the additional costs by increasing our fees to clients.”
Mr Willis’ regulatory fees have increased from £7,285 in 2018 to £17,841 for 2020 — 144 per cent in just 24 months. His 2020 bill was 66 per cent more than the £10,703 levied against his firm in 2019.
The plight is one mirrored by advice firms throughout the industry.
Last week FTAdviser learned of businesses receiving regulatory bills up to 61 per cent higher than last year’s invoice, while some advisers claimed even larger jumps in costs.
For many the primary cause of the hike stemmed from an increase in the Financial Services Compensation Scheme levy.
The dramatic hikes led advisers to sound warning bells that the much-discussed advice gap was likely to widen further as consumers were priced out of advice when firms are forced to increase their fees in order to balance the books.
Mr Willis told his MP a significant proportion of his fees was allocated to the lifeboat scheme to pay for the “misdemeanours of others” and that the “cost of these polluters falls back on [the] good guys who run good, clean businesses”.
His thoughts echo what many advisers have protested for a long time — that the ‘good guys always pay’.
Mr Willis also wrote: “[We have to] to complete a half yearly RMAR report for the FCA which interrogates every facet of the business....one assumes this raft of information would flag up potential or looming failures in quick order to prevent large scale failings.
“Unfortunately the number of wrongdoings and claims continues to increase. This level of reporting clearly isn’t working.”
He flagged rising professional indemnity costs — and the shortage of insurers in the market forcing up costs — and noted that Financial Conduct Authority fees and PI premiums were the “only two costs” of his business he was unable to forecast properly.
Mr Willis wrote: “The receipt of the email from the FCA in relation to this year’s regulatory fees, has incensed me to such an extent that I am compelled to write to you in the hope that you will take this matter up with your colleagues in the Treasury, so that pressure can be brought to bear on the FCA to radically overhaul the future funding of fees.”
The FCA has been approached for comment.
imogen.tew@ft.com
Financial Adviser has launched a letter-writing campaign to urge the Treasury and FCA to reconsider their stance on fees. Send your comments and support to us at fa.letters@ft.com.
