Task: Get a DFM licence Aim: to add value to your practice
Aim of this article: Cost and time spend for your firm and IFAC
Application to the FCA: £5k; IFAC half a day FCA questions post submission; fiirm two days, IFAC three days
Business Plan: firm half a day; IFAC one day
Governance: you need two qualified, one experienced, DFMs. IFAC can supply the second for £500 pm.
Capital Adequacy: Quaterly expenditure requirment; Your income needs to be able to drop to zero for at least one ¼ of the year without you going out of business. So capital must support one quarter of expenses. Expenses defined as fixed ie. One quarter of your annual PII / rent / utility bills / FCA costs / fixed salaries (not yours). Salaried staff
ICAP: You need to produce an Individual Capital Adequacy Assessment document. This is your own document to state how much capital in addition to the above two you think you need to keep to cover your risks. It is unlikely to mean that you need cap ad of more than €50k. But you need to produce a document like this. The output is presented, in summary, as a Pillar 3 statement – that has to be published on your website and states how much capital you actually hold Two days for firm, One day for IFAC.