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APFA prioritises FCA budget freeze and longstop

by: Thomas Smith
  • 20/05/2015
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The Association of Professional Financial Advisers (APFA) has called for a 15 year longstop and for the Financial Conduct Authority (FCA) to freeze its budget for two years.

A longstop of 15 years was the favourite of 76% of advisers, a survey of 176 advisers conducted by APFA in conjunction with Zurich found.

The calls are the latest in long running APFA campaigns both on a longstop for the industry and regulation costs.

The majority (83%) of advisers believed that a longstop would not cause consumer detriment.

Over three quarters (76%) of advisers indicated there would be a cost benefit for consumers if a longstop was introduced by reducing adviser costs.

APFA’s response to the FCA’s fees and levies consultation paper has called for the FCA to freeze its budget for two years, advisers face a rise of 10.2% for 2015/16 fees.

Chris Hannant, director general of APFA, said: “The survey provides a clear insight into adviser feelings on the potential options to address the challenge of unlimited liability, and advisers clearly view the longstop as their most preferred option.

“It is important that we get a solution which addresses these challenges and the recent FSCS levy highlights just one of the major issues facing the industry.”

Hannant added: “The FCA must understand that its year on year fee increases are unsustainable for the profession.

“An organisation that is managing its budget with care should be able to find sufficient efficiencies to still effectively undertake its regulatory responsibilities.

“We recognise that advisers should contribute towards the FCA’s and other regulatory bodies’ costs, however the ever increasing cost of regulation is having an adverse impact on the financial adviser sector.”

Richard Howells, UK intermediary sales director at Zurich, said: “Whilst we understand that fifteen year long-stop remains a clear favourite amongst advisers, at the same time we need to be mindful of the challenge from the FCA to find a solution which ensures there is no possible detriment to consumers.

“We’ll continue to explore all the options to mitigate liability and will be working closely with APFA over the coming weeks to help ensure an outcome that works for the industry, the consumer and the regulator.”

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