FSA warned to drop 'tax on success'

The Financial Services Authority’s (FSA) proposal to base advisers’ regulatory fees on income rather than size is a tax on success, Derek Bradley, chief executive of PanaceaIFA has said.

Bradley called for the FSA to rethink its proposal put forward in CP 11/21: Regulatory fees and levies in October.

In the consultation the FSA suggested charging IFA firms on income rather than by the number of approved persons working within the business so firms are not dissuaded from hiring part-time workers.

Bradley called the proposal "a badly-disguised attempt to get an increase in regulatory fees".

"This consultation paper is a tax on success," Bradley said.

"A small firm that conducts a large amount of business will be subject to the same fee as a larger firm writing the same."

Bradley said the proposal is not fair or pragmatic, and called on the regulator to reconsider.

The proposal covers fees for the FSA, the Financial Ombudsman Service (FOS) and the Money Advice Service.