In March the FCA said it planned to increase the adviser regulatory levy by 10.2% to reach nearly £75m for the current financial year, and that increase was 10% higher than the £68m it levied in 2014/15.
“The FCA must understand that its year on year fee increases are unsustainable for the profession,” said Chris Hannant, Director General of APFA.
“We recognise that advisers should contribute towards the FCA’s and other regulatory bodies’ costs, however the ever increasing cost of regulation is having an adverse impact on the financial adviser sector,” Hannant said.
The FCA, which regulates all financial services firms, has said it had to increase fees to cover rising staff and IT costs. It also covers the costs of Pension Wise, a new guidance service for post-pension reform retirees. Despite initially predicting that this service would cost advisers £35m, this was recently revised by the UK Treasury to £39.1m.
At the time it announced the latest fee rise, FCA chief executive, Martin Wheatley, said: “These proposals seek to share the cost of being regulated and ensure the FCA has the right resources in place to deliver appropriate protection for consumers and make markets work well.”
However Hannant said: “An organisation that is managing its budget with care should be able to find sufficient efficiencies to still effectively undertake its regulatory responsibilities.”
“We will continue to challenge the FCA’s need for such increases and we will continue to press for all the regulatory bodies to be more cost effective and to commit to not increasing their costs.
