The FSA accepts AMI's argument over fees
Posted on 2 June 2009 by
The campaign by The Association of Independent Financial Advisers (AIFA) and the Association of Mortgage Advisers (AMI) against the swingeing increase in regulatory fees originally proposed by FSA on its members was a major factor in the huge number of responses - 533 - to the consultation. Such a response was impossible to ignore and resulted in a major rethink by the FSA on how the fee increases should be apportioned to the different sectors of the market.
The FSA will still increase its total fee income for 2009/10 by an outrageous 35.8% but even more of this increase will now fall on banks, insurers and principle dealers. The average regulatory fee charged to banks and other deposit takers will increase by a massive 109.4% from last year, compared to an only slightly less massive 94.9% in the FSA’s original proposals.
For mortgage advisers the original proposed total levy of £13.7m (£11.3m in 2008/9) has been reduced to £11.6m, an increase of 2.7% compared with the original proposed increase of 21.2%. For firms with general insurance exposure the proposed total levy of £41.2m (£34.4m in 2008/9) has been reduced to £37.6m, an increase of 9% compared to the originally proposed increase of 19.8%
The total reduction from the FSA’s original proposals in the regulatory fees payable in 2009/10 by firms represented by AIFA and AMI, i.e. mortgage brokers, general insurance brokers and IFAs, is £11.7m. Many firms will nevertheless still see their fees increased, but now by a far smaller amount than the FSA originally proposed. The minimum FSA fees, the basic fee which all firms must pay regardless of size, will be frozen at the 2008/09 level.
The FSA commented that: "The FSA works hard to ensure that fees are allocated as fairly as possible, with the largest fee increases being allocated to the firms that require the most use of the extra supervisory resource."
Chris Cummings, director general of AIFA, said: "This is an appropriate and welcome measure in difficult economic times. AIFA and AMI strongly believe that regulatory resources, and therefore costs, should be focused on those firms that require increased supervision and not those in the IFA and mortgage advice professions."
Note. In the interests of transparency I should add that I am an AMI Board Member.
Categories: Regulation
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