The FSA-successor issued consultation paper CP13/1 covering the proposed 2013/14 regulatory fees and levies for the Financial Conduct Authority (FCA), Financial Ombudsman Service and Money Advice Service.
It explained the Prudential Regulation Authority (PRA) would publish its annual funding requirement separately via the Bank of England.
Click here to read more about the funding specifics.
Chris Hannant, policy director at the Association of Professional Financial Advisers (AFPA), the renamed Association of Independent Financial Advisers (AIFA), said this was the multiple year in a row the regulator had put up the funding contribution it expected from financial services firms.
No oversight
His main concern was the lack of oversight on what the FCA and PRA do with the funding. He added that the AFPA had approached the National Audit Office to ask if there was a handle on making sure resources at the regulator were put to good use.
The hike was particularly galling in a context of other governmental departments cutting budgets by 10% due to the ‘age of austerity’ mandate.
The FCA has talked about increasing transparency of its work, but it is currently under consultation and something David Cowell, director at DFM Myddleton Croft, thinks will never see the light of day.
Cowell said he had been “incandescent” after the release of the figures: “It is interesting these people can go around ramping funding by something like five times the rate of inflation and not get called to account for it.
“They will argue this is not a government department, but a separate regulatory authority over which we do not have control. You should not be able to have an organisation that is unanswerable to no-one,” he added.
Investor loses
Elsewhere, the Institute of Financial Planning predicted it would be the end investor that loses from rapidly rising costs.
Sue Whitbread, communications director at the IFP, said: “Anything putting costs up by these sorts of margins will have to be fed through to the end client. It has to be passed on in whole from financial advisers as there is not the kind of margins within the business to be able to absorb increases of this scale.
“The regulator is trying to encourage people to seek advice and get quality advice but they are pushing up costs. A lot of firms have undergone dramatic reviews with RDR and lot are quite lean and mean now so they are unable to make further cost savings to take on an increase like this,” she concluded.
Elsewhere, today on the site we look at different outsourcing options, asking if you would follow Charles Hepworth from Quilter to GAM.
