The Financial Conduct Authority has revealed plans to raise its annual fee charged to its Financial Planning firm segment by 8.9% for 2023/24.
However, due to rebates from fines imposed by the FCA, the actual fees paid by A.13 firms could be lower once bills are sent.
In its periodic fees estimate in its Business Plan out today, the FCA says a typical Financial Planner firm will likely see an annual increase in fees of 5.9%, depending on the outcome of consultation on its business plan.
Some £4.3m of rebates due to fines collected from penalised firms will likely help cap the annual fee increase at 5.9% but this has yet to be confirmed by the FCA.
In its 2023/24 Business Plan, the regulator said it needed to “materially increase” its funding but recognised the rising costs many firms are facing, resulting in a proposal to keep fees below inflation.
According to the FCA Business Plan, to ensure the FCA is adequately resourced it needs to increase its overall Annual Funding Requirement in 2023/24 by £53.3m (9.5%) from £630.9m to £684.2m.
For block A.13, which includes most Financial Planning firms, the total fees collected from the sector will rise by 8.9% to £94.6m for 2023/24 (£86.8m in 2022/23).
The regulator said it would freeze minimum and flat rate fees to ease pressure on the smallest firms.
The FCA predicts the number of firms in the A.13 block will fall from 11,651 currently to 11,375 over the next year, a drop of 2.4%.
The regulator said: “A material increase in funding in cash terms is needed to ensure we can continue to protect consumers from harm, ensure market integrity and foster innovation so our economy can grow.
“We recognise the rising costs many firms are facing and so we are setting our proposed increase in fees below inflation, including freezing minimum and flat rate fees to ease the pressure the smallest firms and freezing application fees.
“Over the past year there have been unexpected external and geopolitical events that have required us to divert resources at short notice. Our resourcing model for the year ahead needs to ensure that we can be agile and flexible with our resources.
“Additionally, we need to resource activity for the Future Regulatory Framework, cryptoassets and other scope changes, and our ongoing transformation. As we go into the second year of our strategy, we will intensify focus on driving efficiency and effectiveness in delivering our outcomes.”
The regulator released its fee proposals for 2023/24 alongside its annual Business Plan this morning.
You can read the consultation paper on the FCA website.
