The Association of Mortgage Intermediaries (AMI) has submitted its response to the FCA’s consultation on its proposed regulated fees and levies for 2020/21.

The trade body says it is “disappointed” that the FCA did not follow the government and offer a range of changes and support for firms of all sizes. AMI says that, unlike HMRC’s approach to money laundering supervision fees, the FCA has prioritised its own agenda and plans for the next one to three years above the needs of the firms that it regulates.

The minutes of the FCA Board meeting of the 26 March detail that when considering a range of mitigations to ease the financial burden on firms the “balance between easing this burden and ensuring the FCA could deliver its business plan and meet its financial commitments was also considered.” AMI says that, consequently, the FCA prioritised funding for a business plan that was designed before the crisis hit and is now largely on hold and potentially out of date, over additional support for firms.

AMI wants the regulator to focus on maintaining the integrity of the market for the recovery. The mortgage intermediary sector needs support from the regulator to ensure that firms will survive this crisis both in the short-term, but also into next year when cash-flow levels may not have fully recovered.

Robert Sinclair, (pictured), chief executive of AMI, said: “Whilst we support the freezing of fees for smaller firms, we cannot support this cost transfer to larger firms. The changes to the proposed fees in light of the Covid-19 pandemic should have been greater and further reaching.

“We are concerned that the FCA’s fee proposals neither reduce its current expenditure nor suggest an intention to reduce spending next year in view of the likely reduced turnover of and indeed likely reduced number of regulated advisory firms. The FCA should look to reduce operational costs where possible rather than continuing along the path that was deemed appropriate pre-crisis.

“Essential costs including authorisation, supervision and enforcement must be prioritised over strategy and competition agendas until there is a clearer view of the post-lockdown landscape.

“Mortgage intermediaries will be vital in the new world where consumers are more vulnerable and with higher amounts of both secured and unsecured debt. People will need good quality advice to help them to understand the best product available, under their potentially changed circumstances, to meet their needs.

“As with the trapped borrower cohort, advice will be key. This budget should be referred back to the board to reconsider its position.”