Financial Adviser's editor Simoney Kyriakou writes to her local MP on the issue of regulatory fees, as part of our Keep Fees Fair campaign
Dear Mr Colburn, I’m writing to you as my local MP to raise concerns over the widening financial advice gap in the UK.
This is being exacerbated by the rising costs levied on advisers in the UK, and a lack of consultative process at the Financial Conduct Authority.
While there are financial advisers in Carshalton & Wallington, I also write on behalf of the more than 26,000 subscribers to Financial Adviser, the weekly paper I edit.
I have been a financial journalist for more than 20 years and despite reading and reporting on many warnings from inside and outside of the industry for many years, I believe we are now at that very tipping point we were warned about; the point at which independent advice is pushed out of operation due to costs, and hundreds of thousands of clients are left without quality, independent advice.
Moreover, the already existing advice gap will gape even wider, meaning many more people who desperately need help with later-life planning, wills, passing on wealth etc, are going to be left stranded.
Also, at a time when we are concerned with improving diversity and inclusion and access to financial services for all members of society, to remove a whole industry of local advisers is highly deleterious to the aim of social inclusion.
We need and applaud the work of the FCA in preventing scams and protecting consumers. But advisers – good advisers, who have rarely or never had a complaint upheld against them – are facing punishing hikes in the fees they pay to the FCA and exponential increases in the levies they pay towards the Financial Services Compensation Scheme.
We have heard figures of an increase of 80 per cent or more year-on-year on small companies.
The calculations seem arbitrary and punitive to a profession that has worked hard to keep its clients in good financial health. The polluter does not pay – the annual ‘punishment’ falls not on the bad apples but the good ones. Everyone else suffers financially from the actions of a few.
Moreover, the FCA said a few years ago it would not consider a ‘regulatory dividend’ for those advisers who have never had a complaint in any given year – so there is no reward for companies who always do the right thing.
Even the FCA’s chairman Charles Randell warned of the impact of fees and levies on advice and wealth management companies alongside the effects of the pandemic. Yet despite Mr Randell’s own comments, the FCA stolidly refuses to consider a review into the way it and the FSCS is funded.
I am writing to ask you to press the prime minister and the Treasury to call for a review and a consultation on the funding models for the FCA and for the much-needed FSCS.