Graded application fee scales issued by the Financial Services Authority (FSA) could have far reaching implications for the future landscape of the market in that they offer encouraging signs for those brokers who wish to remain independent.
The detail contained in the future statutory regulator’s latest Consultation Paper, CP180 ‘ Fees for Mortgage Firms and Insurance Intermediaries, suggests that, contrary to some claims, it may not be looking to price smaller advisory firms out of the market. It has always said it would charge fees based on the size of the firms business, but until now speculation as to whether small firms would really find them affordable has been rife. The thought of high fees and the added burden of the cost of compliance caused many networks to step up their canvassing for independent brokers to join them; and a whole range of other industry bodies have recently started to offer the smaller players appointed representative status. Now, however, it looks as if small broker firms, who form the vast majority of advisers in the market, will at least be offered the chance to remain independent.
While no-one is disputing that fees are going to be more expensive than under the current regime, it is unlikely that, even though advisers will have to pay into the Financial Services Compensation Scheme (FSCS), many will be forced into changing their status due to a decision based on fees alone.
With discounts on offer for early and online applications, CP180 serves as a timely reminder that the industry cannot afford to wait until next Spring before deciding how it will continue under the FSA and this is one time when it really would pay to get in early.
Ben Marquand, editor