FSA funding levy jumps 16%, but advisers will pay less

Advice firms will pay £38.4m towards funding the Financial Services Authority (FSA) in 2012/13, the regulator proposed today.

Consulting on its fees and levies for the year, the regulator said it will have an overall funding requirement (AFR) of £578.4m, up from £500.5m in 2011/12, a gross increase of 15.6%.

However, the levy for the A13 advisory block - for firms which do not hold client money - is down to £38.4m from £39.7m last year, a fall of 3.4%.

The minimum fee for small firms has been kept at £1,000, and the FSA said the largest firms will bare the brunt of the increase in total AFR.

This is likely to be the FSA's final funding requirement before it splits into the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) next year, and Hector Sants, the FSA chief executive, said this explained the increase in overall funding.

"Much of the increase in AFR is the result of the additional resources needed to implement the new regulatory structure but these costs for the restructuring are in line with government forecasts," he said.

With the annual levy for the Financial Ombudsman Service down from £42.7m to £17.7m, firms will £10.00 per relevant approved person, instead of the £30.02 they paid this year, although they will still be subject to a minimum levy of £35.

Most of the funding for the Ombudsman come from case fees and the it recently announced plans to introduce a supplementary case fee of £350 for cases involving the mis-selling of PPI.