According to the regulated fees and levies CP21/8 paper published today, brokers earning more than £100,000 in annual income will see their FCA fee rise to £11.031 per thousand pounds of income.
Overall, the FCA expects to raise £18.4m for its annual funding requirement from those in the A.18 home finance providers, advisers and arrangers block – a 1.3 per cent increase on last year.
Broker fees for the money advice levy will also increase from 13.9p per thousand pounds of income to 17.6p. The same level will apply for the debt advice levy.
There is some better news with the FCA confirming its minimum flat fee for firms in all A-blocks will be maintained at £1,151 for the year.
But an increase in application fees for newly-regulated firms and in consumer credit fees will apply.
In all, the FCA is proposing a £26.6m increase to its annual funding taking it to £616.5m – up 4.5 per cent from the 2020/21 financial year.
TheFCA confirmed the Financial Ombudsman Service (FOS) is increasing its general levy by £12m to £96m for the year, which is also collected by the FCA, and the FOS has increased its case fee by £100 to £750.
“Keeping minimum fees unchanged for 2021/22 will continue to help protect the smallest firms from the impact of Covid-19. The exception to this policy is consumer credit minimum fees,” the FCA said.
And it noted that mortgage advisers will also be impacted by the revised consumer credit minimum fees, so it was considering merging this with the A fee block so only one minimum fee is paid.
Speed up applications
The application process for newly regulated firms or those joining networks has also been a point of criticism, with JLM Mortgage Services previously highlighting that it has taken six months to process and register new AR firms.
The proposed increase to the application fee for these firms was generally welcomed in recognition that applicants should make a larger contribution towards costs to reduce pressure on existing fee-payers.
However, the issue of performance was raised as several respondents to the FCA consultation “made criticisms of the quality and timeliness of our services”, the regulator said.
“They hoped to see corresponding increases in our efficiency in determining applications and an impact on periodic fees in the future.”
Finalising the increase, the regulator said: “The time is never perfect to increase fees.
“As we said in CP20/22 and some respondents confirmed, we believe FCA application fees are not in themselves significant barriers to entry compared with the wider costs of setting up a new business, including the costs of compliance.
“The fees are intended to recover costs that we have incurred. The revalorised charges would still recover only up to two-thirds of our costs, while the great majority of applicants will pay £10,000 or less, with the lowest fee at £250.
“The potential additional revenue of around £6m would mitigate periodic fees to some extent, but not until 2022/23 and the impact is likely to be small.”