The deadline for submissions is Monday 12 April. AIFA is challenging the basis on which the regulator sets its budget, including how it is apportioned, and is encouraging members to support its campaign.
To contribute to its submission, AIFA has employed a firm of forensic economists to assist with the analysis of FSA's budget and its allocation across the industry. Members who want to know more about this research or would like to contribute to the additional unbudgeted expenditure should contact [email protected].
Andrew Strange, director of policy at AIFA, said: "The way the regulator allocates costs is in urgent need of a fundamental overhaul. At present, the model used by FSA can only allocate 50% of their costs directly to the fee blocks. FSA needs to revamp the cost allocation model so that it reasonably allocates the indirect 50% of costs to the right activities and firms.
"It is estimated that the net revenues of IFA firms represent something in the region of 2% of the revenues of the financial markets regulated by FSA. However, advisory firms pay 25% of FSA's total costs. IFAs are therefore burdened with a disproportionate and unfair share of the costs of regulation which are ultimately and inevitably met by consumers.
"FSA must consider the impact that fee increases will have on intermediary firms. The regulator is increasing the cost of advice and therefore the fees that IFAs have to charge for their advice."
Responses to the FSA fees consultation can be submitted online, by email or by post. For further details and to respond see the FSA website here:
www.fsa.gov.uk/pages/Library/Policy/CP/2010/cp10_05_response.shtml
The full consultation paper can be found at:
www.fsa.gov.uk/pubs/cp/cp10_05.pdf
