After what he termed ‘spectacular regulatory failure’, the bulk of the regulator’s powers will be handed to the Bank of England. Among the new agencies launched, the government intends to set up a new Financial Policy Committee intended to prevent another credit crunch, alongside a new Consumer Protection and Markets Authority, to oversee consumer-facing firms.

AMI said this kind of internal flux in the middle of so many industry regulatory changes is unlikely to work out well.

“Brokers could end up having to liaise with both the Consumer Protection agency and the prudential regulatory arm as well,” a spokesman said.

Ray Boulger, senior technical manger at broker John Charcol, also warned that the new agency could hand brokers more paperwork.

He said: “The regulatory fees, which it will charge the firms that it regulates, will effectively be passed on to consumers and so the government should require it to undertake more robust cost benefit analysis than has often been the case with the FSA.”

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The Chancellor also plans to establish a Serious Economic Crime Agency. Hector Sants will also stay on as deputy Bank of England governor to oversee the transition.