From the Ed: Whatever happened to our 'fixed cost' definition?

Scott Sinclair
clock

A promise is a promise is a promise. The FSA pledged a year ago to consult on how to apply a consistent method for calculating firms' expenditure-based requirement (EBR) and, so far… nothing.

This is important. In November, the regulator extended the EBR to all firms based on three months of relevant annual expenditure and doubled the minimum capital resources floor to £20,000. According to a number of stakeholders, this is a bigger deal than the RDR, because the rules appear to punish those businesses that invest in infrastructure and staff, and reward those that do not. The FSA’s current definition of fixed expenditure – used to calculate the EBR – is likely to include, among other things, most salaries and staff costs, office rent and the lease of office equipment. O...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Your profession

Feel Good Friday: Brooks Macdonald gives sports wellbeing advice

Feel Good Friday: Brooks Macdonald gives sports wellbeing advice

Wealth manager has partnered with charity Sporting Wellness

Professional Adviser
clock 03 May 2024 • 1 min read
Adviser guide aims to 'demystify' Consumer Duty annual reporting

Adviser guide aims to 'demystify' Consumer Duty annual reporting

Firms to produce first annual Consumer Duty board report

Sahar Nazir
clock 02 May 2024 • 1 min read
Behavioural coaching a 'tough sell' among prospective clients

Behavioural coaching a 'tough sell' among prospective clients

‘Clients overlook major sources of value from advisers’

Isabel Baxter
clock 02 May 2024 • 1 min read