APFA asks advice firms to help count the cost of regulation
20 August 2015
London, 19th August 2015: The Association of Professional Financial Advisers (APFA) today launched its second annual survey of the advice industry to feed into the ‘Cost of Regulation Index’ that it compiles for the sector.
The Index allows APFA to monitor the annual direct and indirect costs of regulation and compliance. Last year’s research found that in 2013, smaller firms spent on average 12% of their income on direct and indirect regulatory costs; 3% of this was spent on direct fees and levies, with 9% on indirect costs. This meant that in total the sector spent an estimated £460million on regulation, with the average client paying approximately £170 per year towards the cost of FCA rules and requirements.
The launch of the survey comes as HM Treasury and the FCA announced their Financial Advice Market Review (FAMR), which aims to ensure more consumers can access affordable advice in the wake of the recent pension freedoms. In its response to the Review, APFA had noted the need for a “fundamental rethink” of existing rules to try to cut the “significant regulatory burden” on advisers.
Chris Hannant, APFA Director General, said:
“Last year’s survey showed that the average adviser spends a significant amount of revenue on complying with the multitude of rules and regulations at both the UK and EU level. This cost burden then gets passed onto clients in the form of higher fees, meaning that financial advice is increasingly becoming the sole preserve of the wealthy.
In a year which has seen recent increases in the levies placed upon advisers for the FSCS and FCA, as well as changes to MiFID II and elsewhere, it is vital that we have reliable and up to date figures on the true cost of FCA supervision to properly hold the FCA to account.
We appreciate that people will need to collect the information required for the survey, but with HM Treasury and the FCA seemingly in ‘listening mode’ with the FAMR, we strongly urge the industry to get involved.”
Advisers wishing to take part in the survey can do so by visiting www.apfa.net/costs-of-regulation.
Contact
Chris Hannant/Caroline Escott
Tel: 07590 735223
Email: policy@apfa.net
