'Brussels can't be blamed for UK regulatory failure': IFA

'Brussels can't be blamed for UK regulatory failure': IFA
Photo: Anthony Beck via Pexels

The impact of regulatory fee hikes, and the failure of a regulatory system that underpins the need for them, is not the fault of Brussels but that of UK legislators and the Treasury, an adviser has said.

Philip Hanley, director and IFA for Philip James Financial Services, lobbied his constituency MP last year to help fight against disproportionate fee hikes.

The MP, Robert Courts, MP for Witney in West Oxfordshire, has only just responded to the adviser, apologising for missing the initial correspondence last Autumn and pledging to continue lobbying Rishi Sunak and colleagues at HM Treasury.

In his letter to Hanley, Courts said he appreciated the "significant impact" of 2020's eye-watering hikes in the advisers' share of the Financial Services Compensation Scheme levy.

The letter, seen by FTAdviser, recognised that small and medium-sized advice firms in particular were "concerned about both the absolute level and volatility of FSCS levies".

While his letter repeated a line that may sound familiar to those taking part in FTAdviser's 2020 Keep Fees Fair campaign - namely that the FSCS levy is set by the Prudential Regulation Authority and the Financial Conduct Authority as independent bodies - he did say he had spoken with the FCA.

Courts also said he would take Hanley's concerns to the Treasury, stating: "I am keen to make my colleagues in the Treasury aware of your feelings and have therefore written to them on your behalf. I will be in touch when they reply."

Earlier this year, adviser trade body Pimfa outlined its proposals for reshaping UK regulation in the light of Brexit, with a view to creating a better regulatory framework that suited the UK's financial services industry outside of the EU.

At the time, Liz Field, chief executive of Pimfa, told FTAdviser these suggestions included measures to tighten the regulatory framework to protect consumers better, so claims do not end up at the FSCS in the first place.

Therefore, she said the bill would not need to be picked up by "the rest of the good advisers out there".

But even if Brexit presented an opportunity for change, Hanley said it was not simply a matter of "dumping" the blame for the current broken regulatory system at the door of EU legislation. 

He said: "I don't think we can dump much or any of the blame for our current regulatory environment on Brussels.

"We've always had plenty of scope to reshape it, but no appetite from the many vested interests who can really influence or facilitate change.

"Mifid is the only piece of EU regulation which most could name, and it's little more than a footnote to the raft of other stuff we have to contend with."