The Financial Conduct Authority’s (FCA’s) consultation paper CP23/7 proposed that its overall funding requirement had increased from £630.9m in 2022/2023 to £684.2m for the consulted period.
It said this was to ensure it was “adequately resourced to manage its expanding remit”, cover inflationary pressure and transfer policies previously covered by EU financial services law.
New charges include a £5.3m cost for Consumer Duty and £12.7m toward a future regulatory framework.
It also estimated that the levy placed on appointed representative (AR) firms would be flat at £7.1m and each AR would be subject to a £266 fee or £80 for introducer ARs.
The FCA said all firms in the A blocks, which includes mortgage brokers, would see minimum and flat-rate fees frozen as previously proposed in November. It said this was to “to ease the pressure on firms, particularly smaller firms, while inflation is substantially elevated”.
However, it added: “Next year, we expect to return to our practice of increasing minimum and flat rate fees in line with ongoing regulatory activities and resume the staged increases for the A and consumer credit fee-blocks.”
Mortgage brokers fall under the A.18 block for home finance providers, arrangers and advisers, while ARs fall under the A.22 category.
For firms in the A.18 block, the money advice levy has fallen from 13.5p per £100,000 of annual income to 11.7p, and the compulsory jurisdiction levy is flat at £85. The FCA fee for mortgage brokers is flat at £10.072 per £100,000 of annual income.
Number of firms
The FCA tracked that there would be an estimated 5,603 firms in the A.18 block over 2023/2024 up from 5,578 in the period before. The annual income per firm is expected to rise to £2.2bn from an actual figure of £2.1bn in 2022/2023.
The number of ARs is also proposed to rise from 3,266 to 3,614.
It uses this data to estimate the fee rates.
