The Association of Independent Financial Advisers (AIFA) has called for the FSA to radically overhaul its methodology for cost allocation.
The trade body has published its response to the FSA fees consultation. Analysis from forensic accountants RGL Forensics, submitted in support of the response, is used to support AIFA’s argument that IFAs face a disproportionate bill from FSA.
AIFA argues that the regulator should focus its attentions on those organisations that present greatest risk and reduce the regulatory burden on the IFA profession.
RGL Forensics has outlined a series of measures which it argues would bring about a fairer distribution of costs. The first step is achievable before the fee levels are set this year. This reform looks at the allocation of indirect costs while a more substantial, longer term proposal would mean a review the entire fee block regime to bring about a much fairer system for all. Under the first proposal, with the cost allocation based on firm profitability, the bill for intermediary firms would be cut immediately from £70 million to between £22.7 million and £24.6 million.
Chris Cummings , director general of AIFA, said: “The intermediary profession was not the cause of the banking crisis. Therefore it should not be forced to pay for greater scrutiny of those sectors that pose a systemic risk to the economy. FSA needs to radically overhaul the way it allocates its costs.
