RDR paper: FSA admits consumer cost of professionalism rules

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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 stand...

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