Published in its Consultation Paper CP24/6, the regulator said its funding requirement for the year was £775m.
The levy imposed on mortgage advisers who fall under the A.18 block for home finance providers, advisers and arrangers was higher than the £21m charge in the previous year.
For appointed representatives (ARs), the proposed fee was £7.2m, higher than last year’s £6.8m.
The proposed fee for general insurance intermediaries, under the A.19 general insurance mediation block, was set at £38.1m. This was up on the £34.7m levy over the 2023/24 period.
Cost of cryptoassets
The FCA said that, as the Treasury announced it would introduce new legislation to bring cryptoassets and stablecoin into its regulatory remit, the cost of this would be spread across all fee blocks due to the potential whole-of-market threat of money laundering and financial crime.
To reduce the money collected under the annual funding requirement, the FCA uses retained financial penalty revenues. It estimated that the rebate for 2024/25 would be £35.4m, a third down on the year before and lower than its enforcement costs.
The regulator said some fines had been issued but not paid. It estimated a 9.9% fee rebate for the A.18 block at a value of £2.3m and said final figures would be updated in July.
Minimum fees for advisers
The FCA froze its minimum and flat rate fees last year to ease the financial pressure on smaller firms.
In November, it proposed a return to the staged fee increase for the A block, and based on seven responses to this proposal, found that most respondents said it was not the right time for this due to continued inflationary pressures.
However, the FCA said it needed to consider the impact of inflation and its expanding workload on its own costs, adding: “Deferring the uplift merely passes on our costs into future years, placing greater pressure on variable fee payers.”
The regulator said it would not be recouping the cost savings generated by the freeze, but was limiting the increase to 8.75% this year.
The FCA said the minimum fee paid by the A block “had reduced over time and no longer represented the minimum cost of being regulated”. Because of this, it will increase it in stages to £2,200. This will be aligned with consumer credit minimum fees, so all firms in the A and CC.2 blocks will eventually pay the A.0 minimum fee only.
The staged increase has brought the rate for fee block A.0 to £1,750. This will rise to £2,000 in 2025/26, then £2,200 in 2026/27.
For firms in the compulsory jurisdiction of the Ombudsman Service, the flat fee for home finance lenders, advisers and arrangers was proposed to be £90, up from £85 in the previous year.
The general insurance mediation was unchanged year-on-year (YOY) at £100 per £1,000 of relevant business annual income.
Fewer firms
The FCA estimated there were 5,264 firms in the A.18 block, down from 5,428 last year, with an estimated annual income of £2.3bn. This income was unchanged from the previous year.
The number of ARs firms was estimated to have fallen from a confirmed 2,897 in 2023/24 to a predicted 2,756.
