Some brokers face 90% increases
Biba has told the FSA that brokers face the prospect of losing staff if they are forced to pay increased fees for regulation.
In its response to the FSA’s consultation paper CP09/7 – Regulatory fees and levies: Rate proposals 2009/10, which had a deadline of Monday (April 6), Biba argued that the regulator had failed to provide an answer as to why brokers were facing massive hikes.
It also told the FSA that some firms were facing year-on-year increases of more than 90%.
“We would also bring to your attention the weight of anger from the large number of our medium-sized and larger members. Several of these are looking at year-on-year increases in the order of 90%+, at a time when trading conditions have never been tougher. Increases of this magnitude cause huge budgeting issues for firms, especially for those who budgets have already been set. We are aware of a number of firms who may well have to lay off staff to accommodate the fee increases, which we are sure is an unintended consequence from the FSA’s perspective.”
Barbara Bradshaw, chief executive of the Institute of Insurance Brokers agreed that it would create “worrying times” for brokers.
Last week Insurance Times reported that Biba had joined the Association of Independent Financial Adivsers’ (AIFA) campaign against the fee increases, which is thought to have the backing of senior MPs.
Shadow financial secretary to the treasury, Mark Hoban MP told Insurance Times that firms would benefit from extra FSA resources but called on it to recognise the risk to businesses.
“One of the lessons we need to learn from the current financial crisis is that the FSA needs to be properly resourced to do its job and the whole financial services sector will benefit from it being able to recruit senior staff with industry expertise. But we also need to recognise that there should be a close alignment between risk and the level of fees charged.”