In a letter sent to members last week, the network announced the annual levy on firms would rise from £1,518.40 to £2,298.40.
Fees for each individual adviser will rise from £1,486.16 to £2,266.16 per annum.
Firms will also see their commission retention rates rise by 0.25%, with the minimum retention rising from £4,843 to £5,495, though mortgage and general insurance brokers will be exempt.
A spokesman said once this increase was taken into account, firms would see an average fee increase of about 9%, though smaller firms would be more adversely affected.
Managing director Nick Kelly [pictured] said regulation “has become significantly more intensive and intrusive”.
“We fully appreciate the cost pressures on your business,” the letter read.
“As a result we have endeavoured to act in a fair and reasonable way by absorbing the majority of these increased overheads. Given the tough regulatory environment we are operating in, we also believe that it is a false economy to compromise on high standards of regulatory support.”
Stephanie Pickering, an IFA at Verity Wealth Management, a Sesame appointed representative firm, said the fee increase would hurt advisers given other market pressures, most notably the recent Financial Services Compensation Scheme (FSCS) levy and strain on the professional indemnity insurance (PII) market.
“We have no idea what our PII is going to be yet, but based on the fact so many are leaving the market, I expect it will be higher based on all the claims for Keydata and Arch Cru even though firms that likes of ours haven’t touched them,” she said. “My firm wasn’t in existence when Arch Cru was around.”
The number of firms leaving post-Retail Distribution Review (RDR) could also be a factor.
She added: “My initial thoughts are they are trying to claw back the money, because I reckon there will be a massive drop in numbers after 31 December.
“Our biggest problem is that we are not a very established business and if we were, the move would be a no-brainer. We’re not too big that it would cause us too much bother, but sometimes it’s better the devil you know.”
