Advisers operating in the health and protection insurance markets face an increase of 3.2% in their annual fees paid to the Financial Conduct Authority (FCA).
This rise is in addition to the more than 50% increase in the minimum fee for 2022/23 which most authorised firms must pay the regulator – a process which will see another similar increase in 2023/24.
The figures came as part of the FCA’s consultation paper and funding update, which will see the regulator increase its demands from the industry for 2022/23 by £26.4m to £640.1m – a 4.3% rise from the financial year just ended.
According to the latest projection, advisers operating in the A.19 general insurance mediation fee block, which includes retail health and protection advice, will see their contribution rise by £1m to £31.4m.
However, advisers may see their share of the increase exceed the 3.2% rise as the FCA expects the number of intermediaries operating in the block to dip by 2% from 13,057 to 12,812.
This is combined with the minimum fee, which most authorised entities must pay, rising from £1,151 to £1,750, before reaching £2,200 in 2023/24.
The minimum fee was planned to hit £2,200 this year, but the FCA accepted the increase was “sharp” so is graduating the process.
FOS levy
The Financial Ombudsman Service (FOS) budget is unchanged at £260.2m for the year, but the contribution through levy payers is rising by more than 10% to £106m from £96m.
While individual case fees will remain £750, the FOS has reduced the free case allowance from 25 to three cases for most firms and from 50 to 15 cases for the largest financial services firms such as high street banks which have group accounts.
“The FOS is planning to publish a consultation in Q1 2022/23 which will consider different long term funding approaches,” the FCA said.
“The FCA will consider future changes to the Financial Ombudsman Service’s funding, including changes in the split between case fee and levy income, as part of the budget approval process outlined above.”
The consultation on the proposed fees is open until 12 May and the FCA will make rules setting the general levy fee rates in June.
