Adviser FCA fees down 19% after fee block realignment

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Financial advisory businesses will contribute £68m to the Financial Conduct Authority's funding requirement for 2014-2015, a near-19% reduction on last year following a re-working of the regulator's fee blocks.

In 2013-2014, advisers paid a total of £83.6m, but many of these costs have been removed following a decision to add a new fee block for firms holding or controlling client money or assets.

The 2013-2014 allocation also included a £3.7m one-off amount covering the accumulated three-year Retail Distribution Review (RDR) project costs, the regulator said.

Details of the FCA's funding requirement and the contributions of fee payers were outlined in its Business Plan on Monday.

Earlier this year, the FCA consulted on creating a new fee block (A21) for firms carrying on investment business where their permissions include safeguarding or administering assets and/or holding client money.

As a result, firms that resided in fee block A12 were moved to A13 because the ability to hold client money or assets was the only distinction between the fee blocks.

The reason advisers' fees are lower this year is that those firms shifted from A12 to A13 who do control client money pay a fee for doing so via fee block A21, resulting in lower costs for the A13 group.

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