Brokers hit back at “unacceptable” increases
Biba and the IIB have appealed to the Financial Services Authority to back down on its latest proposals on regulatory fees and levies which leaves small firms facing huge increases.
The proposals for 2010/2011 include a £1000 minimum fee, rising from £450, with small firms with whose income is around £300,000 set to be hit hardest. Brokers with an income over £35m also face significant increases.
But medium sized firms could benefit from a reduction in FSA fees under the regulator’s straight line recovery policy.
The move is part of the FSA’s proposals to simplify its fees and levies structure.
In its response to the FSA’s consultation paper, Biba rejects the increase in the minimum fee, arguing that when compared to the rest of the EU, £450 is “considered excessive” but £1,000 is “now seen as unacceptable.”
“To add to the annoyance of our membership, the consultation paper points out that the burden of the new minimum fee will be most strongly felt in the insurance intermediary sector,” Biba said. “It is therefore important that the FSA does not lose sight of the fact that the proposed increase in the minimum from £450 to £1,000 will have a significant impact on the very smallest regulated firms; very largely operating in a very low risk area."
The broker body concludes: “BIBA welcomes the move towards greater transparency in fee setting but our membership is seeking far greater transparency around the ‘value for money’, bearing in mind that most of them do not have a dedicated supervisor.”
IIB chief executive Barbara Bradshaw called the FSA’s proposed fee structure a “burden for the smaller firm” and a “disproportionate amount” to smaller brokers.
“While we welcomed the FSA’s commitment to review the fees and levies structure, we’re nevertheless concerned that the proposals really do penalise the smaller broker.”
In February the FSA plans to consult on the proposed changes.
To view the official responses, download the documents on the right.