Friday, 04 July 2014 11:01
Planners to pay less in fees to regulator overall
The FCA has rubber stamped its funding plans for 2014-15 including changes that mean the category Financial Planners come under will pay 18.7% less in fees overall.
The categories which determine the proportion of fees each group or type of financial body must pay to fund the regulator have been altered.
Most advisers will come under the FCA's fee-block A13.
Those coming under this category will pay £68m instead of the £83.6m paid out in 2013-14.
In fact, the FCA estimates that out of the £68m, money recovered from advisers will be £6m.
There are 8,828 firms estimated to come into the A13 fee block.
Regarding the amount planners and advisers will pay towards funding the regulator, the FCA report stated: "Financial advisers will benefit from the policy change we made to set up a separate fee-block for the activity of holding client money/assets (A.21) as they will be in the wider A.13 fee-block, now with much larger firms (measured by income from regulated activities).
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"As a result, they will pay less fees even though the AFR allocated to the fee-block is larger.
"Although we allocate 15% (£68m) of our annual funding requirement to the A.13 fee-block it is not only recovered from financial advisers.
"We estimate that the amount recovered from financial advisers to be £6m (8.5%) and the number of financial advisers to be 55% of the total firms that pay fees in A.13."
Last year's figure of £83.6m included project costs relating to the implementation of RDR.
The FCA has also confirmed its total annual funding requirement will be £446.4m - a rise of about £14m compared to the previous year and that minimum fees would remain the same at £1,000.
Designated professional bodies, which include the IFP, face a 3.1% rise (About (£0.2m in total).
Category A10, described as 'firms dealing in principal', will also have a reduction (5.6%) which the FCA said reflected reduction in costs relating to Libor.
A21 firms – those 'holding client money or assets or both' – will pay £13.4m under the plan.
The categories which determine the proportion of fees each group or type of financial body must pay to fund the regulator have been altered.
Most advisers will come under the FCA's fee-block A13.
Those coming under this category will pay £68m instead of the £83.6m paid out in 2013-14.
In fact, the FCA estimates that out of the £68m, money recovered from advisers will be £6m.
There are 8,828 firms estimated to come into the A13 fee block.
Regarding the amount planners and advisers will pay towards funding the regulator, the FCA report stated: "Financial advisers will benefit from the policy change we made to set up a separate fee-block for the activity of holding client money/assets (A.21) as they will be in the wider A.13 fee-block, now with much larger firms (measured by income from regulated activities).
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"As a result, they will pay less fees even though the AFR allocated to the fee-block is larger.
"Although we allocate 15% (£68m) of our annual funding requirement to the A.13 fee-block it is not only recovered from financial advisers.
"We estimate that the amount recovered from financial advisers to be £6m (8.5%) and the number of financial advisers to be 55% of the total firms that pay fees in A.13."
Last year's figure of £83.6m included project costs relating to the implementation of RDR.
The FCA has also confirmed its total annual funding requirement will be £446.4m - a rise of about £14m compared to the previous year and that minimum fees would remain the same at £1,000.
Designated professional bodies, which include the IFP, face a 3.1% rise (About (£0.2m in total).
Category A10, described as 'firms dealing in principal', will also have a reduction (5.6%) which the FCA said reflected reduction in costs relating to Libor.
A21 firms – those 'holding client money or assets or both' – will pay £13.4m under the plan.
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