The Association of Mortgage Intermediaries (AMI) says the increase of 15% in the FCA’s Annual Funding Requirement is made worse by the loss of the off-set of financial penalties, so increasing the amount to be funded by firms to an additional 24%.
Robert Sinclair (pictured), chief executive of AMI, said: “The commitment to maintain minimum fees at £1,000 for all directly authorised smaller firms is welcome news. Indeed with the fall in the FSCS levies, the bill for the smallest firms will be much lower than last year. However this should not mask significant increases in the direct costs of the regulator and massive increases for larger firms.
“Indeed the FCA bill for all but the smallest firms holding mortgage and general insurance permissions will increase by around 50% versus last years’ FSA invoice. For the very few firms who are dual regulated, the increases will be even greater.
“The only saving grace is that the invoices that will land in July will be smaller than last year. This is because the levies for the Compensation Scheme are much less than last year. Whilst some might feel that the new FCA has been saved by the FSCS, I would counsel caution as the continual upward trend in the cost of our regulators must be stopped and a cap put on their funding. They must learn to prioritise and allocate resources accordingly, as they would require the firms they monitor to do.
“AMI will be responding vigorously to this consultation. As the regulator appears to have the funding they need, they must be held to account to perform better in protecting consumers and all good firms from those that continue to do damage to our industry. The proposals to review the funding arrangements will give us the opportunity to establish if there might be a fairer way to pay. The mortgage intermediary community presents a very limited systemic risk, which is indemnified by our commitment to FOS and the FSCS. A fairer deal for firms that present the lowest risk is an avenue we need to consider. We need to ensure great value for our hard earned money.”