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FCA proposes inflation-busting 3.8% rise to mortgage broker fees

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  • 09/04/2018
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FCA proposes inflation-busting 3.8% rise to mortgage broker fees
The Financial Conduct Authority (FCA) has proposed increasing fees for mortgage brokers by 3.8% in the 2018/19 financial year.

Firms registered in block A18 for home finance providers, advisers and arrangers will see their total contribution towards fees rise to £16.9m from £16.3m in 2017/18.

Lenders and other home finance providers and administrators included within fee-block A2 will see a similar 3.8% rise to £17.2m, from £16.6m.

The regulator is also increasing its minimum fee (fee block A0) by 6.6% which will see this raise £21m, up from £19.7m.

 

Cost of Brexit

Overall the FCA has proposed an annual funding requirement for 2018/19 of £543.9m, an increase of 3.2%.

This includes preparing for Brexit which the regulator expects will cost it £5m in this period, up from £2.5m in the previous year.

The consultation, which covers all firms regulated by the FCA, is open until June.

It also includes fees for the Financial Ombudsman Service (FOS) which stay broadly similar, and the Money Advice Service whose budget is increasing 11% to £83.5m from £75m.

Other regulatory bodies are also included such as Pension Wise and Single Financial Guidance Body are also included in the consultation.

 

Seven key areas

The plans were published alongside the FCA’s Business Plan for the coming financial year where, along with Brexit, it revealed seven key cross-sector areas of focus. The priority areas are:

  • Firms’ culture and governance which should drive behaviours and produce outcomes likely to benefit consumers and markets;
  • High-cost credit, building on the significant impact already made in the market;
  • Tackling financial crime, including fraud, scams and anti-money laundering to make the UK financial services sector a hostile place for criminals and a safe place for consumers;
  • Data security, resilience and outsourcing since technology plays a pivotal role in delivering financial products and services;
  • Innovation, big data, technology and competition which are driving change in markets;
  • The treatment of existing customers to ensure that they do not get less attention or receive poorer outcomes than new customers;
  • Long-term savings, pensions and intergenerational differences which reflects the changing UK population and their financial needs.

FCA chief executive Andrew Bailey, said: “The Business Plan is an important way in which we are transparent about our priorities for the year.

“We recognise that this year we need to dedicate a significant amount of resource to withdrawal from the EU.

“As a result, setting our priorities this year has involved a particularly rigorous level of scrutiny and challenge to focus on areas where we see the greatest potential for harm,” he added.

 

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