The overall amount of fees payable to the Financial Services Authority (FSA), Financial Ombudsman Service (Fos) and Financial Services Compensation Scheme (FSCS) will increase for small IFA firms this year.
The FSA has finalised the fee rates in its Regulatory fees and levies 2006/07 paper, and Samantha Bennett, press officer at the regulator, says small IFAs and mortgage intermediaries will see an increase in the overall amount of fees they pay compared with last year.
Fees are dependent on the amount of business a firm does and whether it changes its permissions, and Bennett advises firms to work out the exact amount of fees payable by using the regulator’s updated online fee calculator, available from today.
Generally speaking, however, she says an IFA firm with one approved person will pay £3,099 in combined FSA, Fos and FSCS fees this year, compared with £2,723 last year.
Similarly, a small mortgage intermediary who reports £20,000 of annual income will pay an average of £698 in combined fees, compared with £688 last year.
When the figures are broken down, the minimum FSA fee is £1,605 for IFA firms and £635 for mortgage intermediaries.
Additionally, IFA firms will have to pay a Fos levy of £45 per approved person, compared with £25 last year, and will be subject to a minimum levy of £50.
This £45 levy is 28.6% higher than the £35 proposed in the FSA’s initial consultation paper, and Emma Parker, press officer at the Fos, suggests the FSA expects to see more complaints made against IFAs this year as more endowment cases reach the Fos.
Cases against IFAs are usually "longtailed" and take a longer time to reach the ombudsman than those against larger firms, adds Parker.
Meanwhile, mortgage intermediaries will be subject to a flat Fos levy of £50.
Overall, the annual funding requirement (AFR) for the FSA from the IFA fee block is £35.8m, while the AFR from mortgage intermediaries is £9.7m.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email [email protected].IFAonline
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