FSA attacked for 'underhand' way it hiked fees

Friday 1st June 2012

The Association of Mortgage Intermediaries has attacked the FSA over the ‘underhand’ way it has hiked mortgage broker fees.

The trade body, which was consulted by the FSA, says it was disappointed by the outcome. This week, the FSA published its final Annual Funding Requirement, making much of the fact that overall, fees had dropped from its initial projections thanks to its internal cost cutting.

But fees for mortgage brokers have been put up 9.2%, to compensate for a 10% drop in their business. They will now have to pay £14.33, up from £13.12, out of their annual income for every £1,000 of business.

In the consultation paper, the FSA had said that mortgage brokers would pay £13.43 per £1,000 worth of business.

In a hard-hitting statement, AMI said: “At best it lacked competence, at worst it appears underhand.

“With the 10% increase in FSA fees for brokers, we also have higher MAS costs, and for those carrying insurance permissions, the FSCS levy to cover PPI will make a huge difference. Total regulatory costs could rise by more than 40%.”

Robert Sinclair, director at AMI, added: “The policy statement explained the changes in a short paragraph, but there has been no dialogue, or openness via the process.

“I am concerned that the newly divided FSA risks losing industry respect. With fewer firms and pressure on incomes, the new regulatory framework must reduce its costs, not continue to load their expenses on to responsible firms.”