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FCA ups funding requirement to £446m; adviser fees drop 19%

by: Professional Adviser
  • 31/03/2014
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FCA ups funding requirement to £446m; adviser fees drop 19%
The Financial Conduct Authority (FCA) has increased its annual funding requirement (AFR) - the amount it levies fee payers - for 2014-2015, but fees for advisers will drop 19%.

The regulator’s AFR will be £446.4m for the next 12 month period, up from £432.1m in 2013-2014, it confirmed today in its latest Business Plan.

Investment, mortgage and general insurance intermediaries will contribute 31.3% of that total, which is again an increase on the previous year, when it was 30.3%.

However, due to the fee block reallocation carried out by the regulator last year, adviser contributions are down by 19% – they will now be paying £68m for the coming year compared with £83.6m paid last year.

The overall increase in fees was also offset by the £10m the regulator said it had ‘underspent’ in the last year.

A further £43.6m was contributed by the regulator in fees and fines taken last year, in the form of a ‘financial penalty rebate’, which takes the total amount levied on the industry for the coming year to £402.8m.

The FCA’s total budget for 2014-2015 will be £452m. Part of the increase is due to an increase in staff costs as the regulator looks to take on more people to tackle its new competition objective and consumer credit regulation.

This includes people transferring to the regulator from the Office of Fair Trading (OFT), which closed today.

The National Audit Office (NAO) last week said it was concerned about the high turnover of staff at the FCA – 9.7% in 2013 – and urged the regulator to prove it is value for money. 

Money will also pour into upgrading the FCA’s information systems, including the INTACT system, however the regulator said it has made savings elsewhere to fund the work.

 

 

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