The FSA admits it is "possible" some of the costs of its professionalism requirements will be passed on to consumers, as it estimates the total one-off charge to advisers of meeting the rules could hit £225m.
The regulator says, typically, 100% of ongoing costs may be passed on, but it says the proportion of initial costs is less certain.
It estimates one-off costs to the industry of between £155m and £225m, which is consistent with its earlier forecasts. A number of stakeholders were concerned the figure would be significantly higher.
Ongoing, annual costs to the advisory industry could be between £3m and £4m, the FSA says.
The regulator is also sticking to its estimate of a cost to advisers of between £3m and £8m for independent verification of their compliance with professional standards.
Meanwhile, the FSA's own costs will still be between £4m and £5m initially and £3.5m annually.
It says: "We do not believe the feedback we have received materially impacts our assessment of the costs and benefits of the professionalism proposals."
The FSA has also reiterated its previous estimate that only 8% of advisers will leave the industry as a result of RDR, with 5% set to delay the completion of appropriate qualifications until after the end-2012 deadline.
Countering this, it is also insisting firms are active in recruitment, meaning the net position of adviser numbers may not be adversely affected.
Despite this, the FSA does accept the cost of implementing the new professionalism requirements could be passed onto customers, with uncertainty over the initial costs in particular.
A post-implementation review will therefore be carried out to assess any further impact of policy changes on compliance levels and engagement with consumers.
First mentioned in Cridland Report
Second acquisition of 2019
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