The Association of Professional Financial Advisers (APFA) has responded to the Financial Conduct Authority’s (FCA) consultation paper on regulated fees and levies.
Chris Hannant, Director General at APFA, said: “Financial advisers’ share of the FCA’s budget for 2013/14 is £39million – nearly 10%. That is more than life companies, general insurers or mortgage lenders will be paying. The allocation of the FCA budget is supposed to reflect its own assessment of risk. We’re calling for the FCA to rethink this allocation for advisers because it overestimates the risk they pose.
“Following the implementation of RDR, the risks to consumers from the advice sector have reduced – that was a key objective of the RDR. It seems odd therefore that there has been no corresponding fall in advisers’ fees. The FCA also needs to take account of the fall in adviser numbers we’ve seen, not least because with fewer advisers now – 25% fewer by the FCA’s own measure – less resource is arguably needed to supervise those who remain.”
As well as responding to the FCA’s consultation, APFA Chairman John Gummer, Lord Deben, is writing to FCA Chief Executive Martin Wheatley and Andrew Tyrie MP to raise APFA’s concerns over the proposed fee allocation.
Hannant added: “We’re pushing the FCA hard to look again at the way it is apportioning costs this year, and we’ve encouraged members to raise this too. As things stand, advisers look set to shoulder a disproportionately large amount of the fees, an amount which doesn’t even tally with the FCA’s own assessment of risk. We want a clear commitment from the FCA to look again at its fee allocations as a matter of urgency.”