The Financial Conduct Authority intends to raise mortgage adviser authorisation fees by 67 per cent.

In its CP20/22 consultation paper, the regulator floats the idea of collapsing existing fee blocks into 10 categories, which would see mortgage advisers become part of category 4, attracting a flat fee of £2,500 instead of the £1,500 charged previously.

The FCA says that this makes for a simpler pricing structure, which “will help to make the costs of authorisation more transparent”.

As well as this, the regulator wishes to introduce a ‘changes in control’ charge of £500 for when a business intends to gain or extend its control over an authorised person and to request £250 for senior management regime permission applications.

“This charge would also apply to principal firms applying on behalf of appointed representatives,” says the FCA.

“Many of our charges have not changed since our predecessor, the Financial Services Authority, set them nearly 20 years ago,” explains the FCA.

It adds: “Over that time, their value has eroded, passing an increasing share of the processing costs to existing fee-payers.

The regulator continues in laying out its case: “The total cost of authorisations in 2019 was £19m. Application fees raised revenue of £6.2m, equivalent to 33 per cent of the cost. If we were to revalorise all application fees in line with inflation from the dates that they were introduced, it would have increased revenue in 2019 to £9.7m.

“This would raise the recovery rate to 46 per cent, closer to the FSA’s lower target of 50 per cent, but still below it. It would represent an overall increase in fees of 56 per cent. Full cost recovery through existing application fees would require an increase of 218 per cent.

“The impact of application and transaction fees on our annual funding requirement is not large, but we believe it is fair in principle that applicants should contribute more towards our costs.”

The consultation closes on 22 January 2021.