The Association of Mortgage Intermediaries is concerned over the “significant increase” in fees for firms as a result of the direct costs of the Financial Conduct Authority.
AMI said the proposed annual funding requirement of the combined Prudential Regulation Authority and FCA entities will increase from £560m to £646m.
This increase of 15% is made worse by the loss of the offset of financial penalties therefore increasing the amount to be funded by firms to an additional 24%.
Robert Sinclair, chief executive of AMI, said: “The commitment to maintain minimum fees at £1,000 for all directly authorised smaller firms is welcome news. Indeed with the fall in the Financial Services Compensation Scheme levies the bill for the smallest firms will be much lower than last year. However this should not mask significant increases in the direct costs of the regulator and massive increases for larger firms.”
Sinclair added: “Indeed the FCA bill for all but the smallest firms holding mortgage and general insurance permissions will increase by around 50% versus last years’ FSA invoice. For the very few firms who are dual regulated the increases will be even greater.”
He said that a small reprieve will come in July when the invoices which will land will be smaller than last year.
Sinclair said: “This is because the levies for the compensation scheme are much less than last year. Whilst some might feel that the new FCA has been saved by the FSCS, I would counsel caution as the continual upward trend in the cost of our regulators must be stopped and a cap put on their funding.
“They must learn to prioritise and allocate resources accordingly as they would require the firms they monitor to do.”
AMI said it will be responding vigorously to this consultation and is expecting the regulator to be held to account to perform better.
Sinclair added: “The proposals to review the funding arrangements will give us the opportunity to establish if there might be a fairer way to pay.
“The mortgage intermediary community presents a very limited systemic risk which is indemnified by our commitment to the Financial Ombudsman Service and the FSCS.
“A fairer deal for firms that present the lowest risk is an avenue we need to consider. We need to ensure great value for our hard earned money.”