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Wealth & fund firms holding client assets face FCA fee spike
by Danielle Levy on Oct 31, 2013 at 15:46
New tariff base
The tariff base for A21 will be the amount of client money and/or custody assets held by the firm, which the FCA said is consistent with its approach for other fee blocks.
The fee rate for client money would be higher than for custody assets due to the different risks to clients posed by the two activities, and the amount of effort involved with supervision. A13 on the other hand will see no change to its tariff base. The FCA acknowledged these changes will result in 'large increases for some firms'.
Under the new system A13 would see £70.6 million in costs recovered, working out as £2.84 per £1,000 of income, while A21 would have £13.1 million in recovery costs on a fee rate of £92.59 per £1 million of client money held plus £0.31 per £1 million of safe custody assets held.
Impact analysis for the proposals carried out by the regulator found that those in A13 without client money and assets permissions will see no change in their fees or a decrease, while firms responsible for higher amounts of client money would see increases.
Overall, across the two fee-blocks, 44% of firms would have seen no change, 43% would have seen a decrease and 13% will see an increase.
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by Danielle Levy on Dec 06, 2013 at 07:46