HM Treasury and the financial lifeboat scheme have confirmed they are working with the Financial Conduct Authority to assess the effect of the fee and levy hikes on financial services companies, as cabinet ministers help pile on the pressure.
In response to questions raised as part of our Keep Fees Fair campaign, a spokesman for the Treasury told Financial Adviser they were aware of advisers’ and their MPs’ communications.
The spokesperson said: "We are currently working with the FCA to support its monitoring the impact of the increased regulatory fees.”
The spokesperson also confirmed the Financial Services Compensation Scheme would 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”.
Fiona Kidy, chief financial officer for the FSCS, said: "We share the real desire to help reduce the levy on the industry and protect customers. As part of our strategy, FSCS is collaborating with FCA, the Financial Ombudsman Service and the Insolvency Service around phoenixing."
She said in addition, the FSCS has sought to address these concerns by convening industry panels to exchange information on current issues and potential concerns in the investment and pensions and general insurance markets.
This came as advisers continued to lobby their MPs, as well as members of the Treasury Committee, to push for a review of the way in which the FSCS is funded. Some of the MPs writing to the Treasury Committee and HM Treasury are cabinet ministers.
The letters, part of Financial Adviser's Keep Fees Fair campaign, highlight the problems arising due to escalating professional indemnity insurance premiums and a contraction in the market, in addition to eye-watering annual increases in the levy advisers must pay.
Some advisers have been hit with hikes of 80 per cent, 90 per cent and even 120 per cent for this year’s regulatory bill.
Responding to one adviser's letter, that of James Carroll of Hughes Firman Ovel, secretary of state Priti Patel said she acknowledged his concerns and agreed the FCA needs to be an effective regulator. She also said she would raise Mr Carroll's concerns.
In her response, seen by Financial Adviser, Ms Patel said: "I have noted your comments and concerns. Given the regulatory failures that happened in advance of the financial crash and the need for confidence in the financial profession, it is important that the FCA is an effective regulator.
"I would be glad to raise your concerns directly with ministers in the Treasury and the governor of the Bank of England for them to consider and respond to."
The Treasury Committee, in its hearing with the FCA's new chief executive Nikhil Rathi this week (November 4), confirmed it had received a "huge amount of correspondence" from IFAs on the FSCS levy.
But the FCA boss said while the regulator was aware of the "burden" increasing regulatory costs were putting on the advice community, "for the majority of advisers it's a small portion of their overall regulated income".