FeesSep 10 2020

MPs urge Treasury to commit to FCA fee review

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MPs urge Treasury to commit to FCA fee review
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BySimoney Kyriakou

Constituency MPs have written to the Treasury to urge it to carry out a timely review into the way the Financial Conduct Authority and the compensation scheme are funded.

As IFAs' letters started to reach constituency MPs as part of Financial Adviser's Keep Fees Fair campaign, many have taken direct action on behalf of their adviser constituents to press for a fairer funding structure.

Labour MP Emma Hardy, shadow minister for FE and Universities and MP for Hull West and Hessle, received a letter from Kevin Ferriby, managing director of Informed Financial Planning.

She wrote in turn to Jesse Norman MP, financial secretary to the Treasury, to raise the concerns Mr Ferriby outlined in one of his Keep Fees Fair letters that he sent out to local constituency MPs. 

Her letter, seen by Financial Adviser, discussed the serious impact that exponential hikes in professional indemnity insurance and continually rising regulatory fees and Financial Services Compensation Scheme levies are having on advisers.

She raised concerns that the disproportionate effect of fees is having not just on advisers but on the communities they serve – and urged the Treasury to review the funding structure of the Financial Conduct Authority to prevent a worsening of the advice gap.

Ms Hardy stated: "Good, affordable financial advice has never been needed more. I would urge the government to prioritise a review of the escalating costs to the IFA sector and the role that the FCA and the Financial Ombudsman has played in arriving at what, for many firms, is becoming an unsustainable financial burden."

Fellow Labour MP Karl Turner, for Hull East, and shadow minister for Legal Aid, also responded to a Keep Fees Fair letter from Mr Ferriby stating he would be writing to government ministers to raise these concerns.

Mr Ferriby commented: "Like many IFAs, I have written to our local MPs following the latest, unpalatable increase in regulatory costs. I understand that many people are disappointed with the lack of action from their MPs.

"My experience has been somewhat different in that Mr Turner (MP for the constituency where I live) has promised to write to government ministers to raise our concerns and Ms Hardy (MP for the constituency where the office is) has already written to the financial secretary to the Treasury."

The office of Stephen Hammond, MP for Wimbledon, has also responded to a copy letter and confirmed the issue "has been raised with the Treasury" and that he would share "any response received".

The Treasury welcomes views from the industry and we encourage the industry to continue to engage with the regulators who are responsible for setting regulatory fees. -- Treasury spokesperson