Success in Fees Campaign

Katie Taylor - Political Analyst - 10th June 2009 - 14:49

Back in October 2008 in an interview with the Financial Times, FSA Chairman Lord Turner, implied that intermediaries had been paying too much in regulatory fees, especially in relation to the levels of risk they posed to the economy when compared to larger institutions.   

This issue once again came to the fore in February when FSA published their proposed regulatory fees and levies for 2009/10, proposals which saw intermediaries fees increase dramatically without justification.

As members know, AMI launched a highly publicised ‘fees campaign’ in response, urging those in the profession to unite with one voice and respond to the FSA’s proposals.

We assembled and coordinated a fees strategy group to ensure members were fully informed of all the issues, to develop strong workable solutions and to mobilise grass-roots support. We also sent correspondence to hundreds of firms asking them to respond to the FSA’s fees consultation paper.  Not only did the profession respond but you responded in force – an impressive 533 responses to be exact.

On the political side of things we engaged in a highly constructive dialogue with HM Treasury, as well as meeting with civil servants and politicians from across the spectrum to outline our concerns. Additionally AMI’s Chairman, the Rt Hon John Gummer MP personally intervened on the matter due to his strength of feeling that fees needed to be reduced.

We also met with senior FSA staff to voice the distress of the profession, and embarked on a significant media programme to highlight the issues raised.

We were therefore delighted that FSA took note of our campaign and lobbying and this week reduced the level of fees payable by IFAs and mortgage advisers by £11.7million compared to the initial February proposals.

Mortgage brokers will only see a 2.7% hike, compared to the original proposed increase of 21.2%.  The increase in fees for IFA’s, which were slated to rise by 15%, will now increase by just 4.8%. And for firms with general insurance exposure, fees will increase by 9% compared to the proposed 19.8% increase. The FSA says once the financial penalty rebate is applied, approximately 10,000 of the smallest firms will see a fee reduction compared to the previous year.

This is an appropriate and welcome measure in difficult economic times.  AMI strongly believes that regulatory resources, and therefore costs, should be focused on those firms that require increased supervision and not those in the mortgage advice profession.

This announcement also shows the power of constructive lobbying and it is testament to the whole profession that uniting with one single voice on such a key issue has resulted in such a positive outcome, providing significant savings for firms.

Finally I want to echo John Gummer’s sentiments in thanking FSA for their bravery in changing their minds on such a key issue.