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FCA confirms adviser levy to increase by 13%

by: Carmen Reichman
  • 01/07/2013
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FCA confirms adviser levy to increase by 13%
The Financial Conduct Authority (FCA) has today confirmed that its levy for the coming year will be £432.1m as previously announced.

In its policy statement the FCA outlined the combined FCA/Prudential Regulation Authority (PRA) annual funding will total £646.3m – a 15% increase on last year.

Advisers will see a 13% increase on last year’s levy to £39.2m.

They will make up 9% of the regulator’s total annual funding requirement (AFR), which APFA has previously called “disproportionately large”.

It means that advisers will pay more than life companies, general insurers or mortgage lenders despite their risk and numbers decreasing following the Retail Distribution Review (RDR).

The FCA received 36 responses to the fees consultation from 15 trade bodies and 21 individual firms which complained about the disproportionate rise in fees.

The regulator said the increase in fees for the A13 block, which includes most financial advisers, included one-off RDR project costs which made up £2.9m – the underlying fees increase was 5%.

It said it had needed to raise its total annual levy to be able to pay for increasing numbers of front line supervision staff, an increase in information technology (IT) costs and an increase in central support services costs.

It would also build a new competition department to ensure a competitive industry and implement the Mortgage Market Review.

The ombudsman service consulted on its case fees and budget separately and drew up a total budget for 2013/14 of £283.6m. Of this £23m will come from FCA fees.

The fees for the Money Advice Service to be collected by the FCA will amount to £42.94m, of which advisers wiil have to foot £2.7m.

The FCA said it would invoice fee-payers from July 2013 onwards for their 2013/14 periodic fees.

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