The Association of Mortgage Intermediaries has called the City regulator’s plans to lift fees for brokers by 9.2% to £23m “a slap in the face” for intermediaries.
The Financial Conduct Authority has set out proposals to fund its work for the coming year in a consultation paper, called ‘FCA regulated fees and levies: rates proposals for 2024/25’.
It classes brokers as fee-paying market participants grouped in block A.18 (which also includes advisors, arrangers and dealers), who will see their levy rise from £21m this year.
Appointed representatives will see fees rise 5.8% to £7.2m, while general insurance intermediaries — under the A.19 block — see fees lift by 9.8% to £38.1m.
The FCA froze its minimum and flat rate fees last year “to ease the financial pressure on the smallest firms”.
Overall, the FCA plans to raise its budget by 10.7% to £755m next year, as it levies fees from a wide range of large and small financial firms covering insurers, portfolio managers and investment businesses.
But Ami chief executive Robert Sinclair says: “The FCA 2024/25 fees proposals are a slap in the face to mortgage brokers.
“They have seen no protection from our regulator as they have borne the brunt of the pressures brought by interest rate volatility and the changes invoked by Treasury under the Mortgage Charter.
“At a time when we are seeing falls in most firm income, the FCA drops in a mind-boggling, inflation-busting rise of 8% in fee rates to deliver a 9.9% increase in the costs of supervising mortgages. This excludes the Network supplement.
“They are giving us five weeks to respond to the biggest rise in fees ever on a market functioning responsibly with low inertia.”
The FCA, led by chief executive Nikhil Rathi, says it will use the cash to begin a range of “multi-firm work and market studies across different sectors to drive up standards”.
This will include “a review of firms’ treatment of customers in vulnerable circumstances” as well as a study into “unit-linked pensions and long-term savings products to test the transparency of charges across value chains”.
It adds its continuing work will test the implementation of the regulator’s Consumer Duty reforms and “explore the role of technological solutions in enabling financial inclusion”.
The regulator will accept comments on its proposals until 14 May, and will then publish its feedback in a policy statement in July.
