Galbraith says brokers should not be charged more
An FSA proposal to raise levies by 36% will create a “significant burden” for brokers, says Eric Galbraith, Biba’s chief executive.
The authority wants to hire 280 more staff as a result of the economic crisis and will have to increase its charges to the companies it regulates across the financial sector. The total will rise by £118m to £438m for the year from 1 April (see chart, right).
However, Biba believes the increases punish well-behaved businesses, as brokers have caused little disruption to the financial sector.
Galbraith said: “These fee and levy proposals add a significant burden at a very difficult time in the economic cycle. We want to see the FSA give a much more detailed justification for them.”
As well as the FSA fee, companies pay annual levies for the Financial Ombudsman Service and the Financial Services Compensation Scheme.
Although smaller firms have had only a 5% increase in these two charges, medium-sized businesses were slapped with rises of up to 30%. Companies with turnover of more than £20m face a 70% hike.
“While we appreciate that the FSA has an ever-growing workload and that the fees for 10,000 small firms have been frozen, we are alarmed that medium and larger insurance intermediary firms are facing a year-on-year increase on their regulatory fees and levies of 30% to 70%,” Galbraith said.
Levies for the country’s 10,000 smallest financial firms will be frozen, however.
Hector Sants, chief executive of the FSA, said: “The financial services industry is facing unprecedented challenges, which look set to continue.
“We will need additional financial resources to meet these demanding priorities for the coming year. This will mean higher fees for regulated firms, although we have been careful to ensure, as far as possible, that firms requiring the most regulatory work and engagement pay proportionately.”