But overall cost of regulation is set to reduce
Brokers are facing a bigger bill from the FCA this month as they see their annual fees increase by as much as 4.6%.
The FCA has announced that its total funding from general insurance mediators will increase by 3.2% to £25.9m from £25.1m last year. The cost will be shared by 12,527 firms including insurance brokers.
Insurance Times analysis of FCA figures reveals that large brokers would be the hardest hit, followed by medium-sized firms, while a typical small broker will see a slight increase.
To calculate the fees, Insurance Times fed the revenues for three hypothetical brokers into the FCA fee calculator: a small broker with annual revenue of £250,000, a medium-sized broker with £4m, and a large broker with £700m.
Fees for a large firm increased by 4.6% to £1.3m from £1.2m, while a medium-sized firm saw a 4% increase to £8,240.51 from £7,918.91. A typical small broker experienced a 1% increase from £1,266.11 to £1,278.
Overall reduction in cost of regulation
But despite the FCA’s bigger bills, brokers will actually pay less for regulation than they did last year as the FSCS, Financial Ombudsman Service (FOS) and Money Advice Service (MAS) have already announced lower bills.
This means that a typical large firm will see a 20.9% drop to £4.8m from £6.1m, while medium sized firms will pay 20.5% less, from £35,452.97 to £28,201.34.
Small firms will get a 15.4% reduction to £2,534.16 from £2,993.88.
Biba head of compliance and training David Sparkes said: “The FCA-specific figures compared to last year will be higher but the remaining fees should be where brokers will see a saving.
“If the actual invoices come out in line with this, it will be good news for brokers and some welcome relief from the financial burden that brokers face.”
For the 2014/2015 period the FCA said its total annual funding requirement (AFR) would increase to £446.4m from £430m. Its bill for prudential supervision work has increased to £15.9m from £11m for the 23,000 firms it prudentially supervises, excluding banks, insurers and major investment firms.
The regulator added it had taken on additional responsibilities to drive its competition objectives and had also not returned as much under-spend to fee payers as last year.