Insurance advisers are set to contribute £39.4m to the FInancial Conduct Authority’s (FCA) annual running costs for the coming financial year.
Furthermore, the minimum fee that all registered firms must pay will also increase by an expected 9.5% to £2,200, from the current £2,000 level.
The FCA has proposed increasing the levy for those advisers in the A.19 general insurance distribution group, including health and protection advisers, by 1.4% in the 2026/27 financial year.
If this proposal is approved, intermediaries will collectively pay around £500,000 more than the £38.8m they are expected to hand to the FCA during the current financial year.
This rise has been proposed despite the FCA looking to increase its annual budget by only 0.7% to £788.9m, which must be funded by those operating in the financial services industry.
However, intermediaries are likely not to see too much change in the way their fees are calculated as they will again pay £1.59 per thousand pounds of income once they break the £100,000 income level.
This is due to the expected 1.6% rise in aggregate income across the insurance advisory industry.
The FCA puts the level in the 2026/27 year to £25.2bn, compared to £24.8bn for this year.
Meanwhile, the rise in fees looks likely to be spread across fewer firms as the FCA expects the number of intermediary firms to be liable to pay the levy to fall by 2.5% to 10,826 in 2026/27 from 11,105 in the current year.
This could be a result of mergers and acquisition activity among protection professionals.
For those wishing to estimate the amount they could pay towards the £39.4m proposed by the regulator, a fees calculator can be found here.
The proposed rise in fees will be discussed with FCA fee-payers, with the consultation ending on 30 April.
