According to Gary Heath, FCA fees collected for the FSCS will reach an eye watering £8,700 per adviser this year – as compensation for failed SIPP firms, corrupt DB payments and failed football-adviser firms bite. So I decided to take a closer look.
This year’s levy published just this week for the year we are currently in, is likely to see a rise, but the rates have not been posted to the fees calculator site yet, making meaningful analysis all but impossible.
But the years 2016 to 2018 in general terms saw a fall in price, as total levies for a firm turning over £100k in each of four areas – Pensions, GI, Mtge and Investment has fallen.
The analysis garnered from https://www.fca.org.uk/firms/calculate-your-annual-fee/fee-calculator indicates that the above firm would have seen fees move from £7,817 in 2016, to £6,821 in 2017 and £6,123 in 2018 year.
Sadly the final rates published do not include the special one off invoices that so many firms receive in the last week of March each year. The final calculations are nothing if not complicated….which reminds us of a quote by Walter Scott….”if first we practice ….”
The Annual levies are routinely greeted with howls of protest. But after all, we are just conduits, so why complain? It is not us who pay, but our clients, and protest can only be valid if customers will not stomach the fee increase. And so far, it appears that they will. Most analysis of fees levied on customers indicate that they are not price sensitive, but that IFAs are incredibly price sensitive. After all, as former SJP CEO Bellamy proudly states this week in https://www.moneymarketing.co.uk/ex-sjp-boss-bellamy-defends-charging-model SJP are proud to charge 6% plus 1.5% with six year lock ins!
We project our own fears onto clients, and put our own price on our own head.
“If you really put a small value upon yourself, rest assured that the world will not raise your price.”