Brokers are rightly aggrieved by FSA fees, argues Phil Whitehouse, head of The Mortgage Alliance (TMA)
Talk about kicking firms when they are down. It’s little wonder that the FSA has come under a barrage of criticism recently from the mortgage intermediary market as it announced a hike in fees for mortgage brokers.
This backlash has come after the regulator revealed a 9.9% hike in its annual funding requirement for 2010/11, which includes some harsh figures for the broker community to digest.
For mortgage brokers, minimum fees payable to the FSA are set to rise from £745 to a minimum of £1,000, a 34% increase on previous fee levels. The consultation paper published by the regulator on the proposed fee changes revealed that mortgage brokers could even be facing a maximum increase in fees of up to 67%.
However, despite the increased burden on mortgage brokers, the regulator claimed that the introduction of this ‘fairer’ and ‘more transparent’ fee structure means 60% of firms will actually pay less. The increased cost of intensive supervision will be levied on those firms whose size and impact require the most regulation from the FSA.
It has been reported that five unnamed trade associations were against the new minimum £1,000 fee. Specifically, the trade bodies raised concerns that the FSA has not provided any evidence that the cost of regulating mortgage brokers has increased in proportion to the raising of these fees. Overall the funding costs relating to mortgage brokers rose by £3.5m on the budget for last year.
To highlight just one of the trade body voices, I’d like to echo the sentiments of Robert Sinclair, director of AMI, when he commented: “In responding to the banking crisis
