Proposed FSA fees will hit small brokers hardest

Brokers have attacked the FSA’s latest proposals on regulatory fees and levies after small firms were left facing increases of up to 200%.

The proposals for 2010/11 include a £1,000 minimum fee, up from £450, with small firms reporting a regulated income of up to £300,000 expected to be hit hardest.

Brokers with an income over £35m also face significant increases. But medium-sized firms could benefit from a reduction in FSA fees under the regulator’s straight-line recovery policy.

The move is part of the FSA’s proposals to simplify its fees and levies structure.

In its response to the FSA’s consultation paper, Biba rejects the increase in the minimum fee, arguing that when compared to the rest of the EU, £450 is “considered excessive” but £1,000 is “now seen as unacceptable”.

IIB chief executive Barbara Bradshaw called the FSA’s proposed fee structure a “burden for the smaller firm” and a “disproportionate amount” to smaller brokers.

“While we welcomed the FSA’s commitment to review the fees and levies structure, we are nevertheless concerned that the proposals really do penalise the smaller broker.”

In February, the FSA plans to consult on fee levels for 2010/11 using this new fee model.