MPs urge Treasury to commit to FCA fee review

The Treasury acknowledged that it has received correspondence from MPs, advisers and others relating to calls to review the funding structure of the FCA, and said it was "aware of concerns about the impact of regulatory fees on financial advisers".

When asked whether it will commit to assessing the need for a funding review, a spokesperson for the Treasury commented: "The Treasury works closely with the FCA to ensure that the market for financial advice works well. However, the FCA operates independently within the statutory framework agreed by Parliament and is responsible for setting the regulatory fees on industry.

"We are currently working with the FCA to support its monitoring the impact of the increased regulatory fees. The FSCS has also said it will be working closely with industry and regulators to understand any concerns about updates to this year’s levies and seek to explore how they can be addressed."

Financial Adviser also asked whether the Treasury would be amenable to discussion/consultation with the financial services industry over how a potential restructure might best be carried out.

In response, the spokesperson said: "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."

What sort of levy in the future?

Last week, more advisers joined Financial Adviser's Keep Fees Fair letter-writing campaign, which has template letters kindly supplied by compliance expert Phil Dibb and by the Personal Finance Society.

Many have called for either a product levy or a market and assets-based levy as a reasonable means of changing the structure.

Ken Davy, chairman of SimplyBiz, said product levy proposals in the past may have been seen as a "clumsy and complicated way" of "adding extra cost to policies", and this was not the best option.

Instead, he has called on the Treasury to consider a "simpler type of ‘product levy’ which would be easy and cheap to administer and fall on the companies who benefit directly from the financial advice given by advisers".

He explained: "This would be a levy on the billions of pounds of funds accumulated and managed by the product manufacturers. The amount required would be a tiny fraction of the annual charges made on the funds and be totally irrelevant to any individual policy holder or provider.

"It would also follow the best practice code as regards any levy or tax, in that it would take the smallest amount from the broadest possible collection base, while also being cheap to administer."

Philip Hanley, director of Philip James Financial Services, wrote to his constituency MP Robert Courts to ask him to engage in dialogue with the Treasury and "bring the FCA to the table".