Upcoming Webinar: what is a green mortgage?

The Green Mortgage Advice Initiative (GMAI) brings you a new webinar: What is a green mortgage. The event takes place on Monday 29th July…

Important fee changes for mortgage intermediary firms in 2024/25

The FCA has released its policy statement on the Fees & Levies payable by regulated firms for 2024/25 – we pull out the important fee changes…

AMI secures significant win for the protection industry

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Mortgage Vision returns for 2024 with extra locations

This year’s Mortgage Vision events take place across the country in September and October, with some new locations added for 2024…

AMI Consumer Duty Factsheets update

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Your June ’24 update from AMI Chief Executive Robert Sinclair

AMI Chief Executive Robert Sinclair gives his June update in what has been a quiet month for the industry with the upcoming general election…

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May 21 – I want some more?

The latest FCA fees consultation is the first tangible sign we have had of how the new ruling regime at the regulator is going to treat those it authorises and supervises.  For those looking for a transparent and balanced regulator there is much to disappoint.  On the face of it, being tougher on becoming authorised and tighter supervision of new firms is sensible.  I am unsure why it takes a transformation programme and more funding to do that.

Regular readers will recall my incandescent disappointment when the proposed FSCS levies were announced.  This result of abject failure by the FCA regime to control activity left them having to publicly apologise for their inaction on supervising London Capital and Finance and Connaught group.  There is still more to come on Woodward and others.

My hope was that the Annual Business Plan, Report and Fees consultation would give us clarity on their roadmap.  These historically have come together in early April to allow those with professional interests to make a balanced judgement on their what, why and how.  However, they have decoupled the usual plan from the fees request and asked us to agree to their new budget blind.  They also produced this a further week later than usual giving us a cursory five weeks to respond.  We will not see the plan until July.

There are other signs.  The tried and tested approach is that the FCA consult on the rules and structure of their fees in the late autumn which allows them to then produce a Policy Statement in Q1, setting out the agreed approach, which is followed by the April consultation on the amounts to be levied.  The consultation response is this year rolled into the final fees paper as a “done deal”.

In doing this, we are seeing a number of structural and financial changes for our sector.  The FCA has been less than transparent in its narrative around its Ongoing Regulatory Activities (ORA) budget and its Annual Funding Requirement (AFR).  By significantly increasing the permission and authorisation fees for networks asking to add firms, they are now recovering the full cost.  This is not a new cost but other firms were subsiding this.  However, this cost transfer is not recognised in the AFR or ORA, by matching reductions.

For the first time we are being consulted on a new fee class on networks as part of the fee rate consultation, not as part of the usual autumn rule change process.  With such a short five week cycle this is both unusual and not in accord with best regulatory standards which FCA have historically been known for.  Finally, they are raising the minimum fees on consumer credit permissions where most mortgage advice firms have no income.  This breaches assurances given in previous regimes.

The nature of my job and the length of time I have been in role means that I have multiple contacts at operational levels within the FCA as well as access to the upper reaches.  I appreciate that we have been in remote working for over a year and they are embarking on a transformation programme to resolve their internal issues, but the culture is “shot”.  If they heard what I hear from within a regulated firm, then the FCA would be deeply worried about its ability to perform and therefore to survive.

We have a sudden narrative that indicates that there are deep concerns within the FCA about the network model.  There is no full rationale for this yet.  Anecdotal evidence is that poor behaviour in the investment advice model and the general insurance structure has escalated concerns.  But the new costs are on all networks and appointed representative firms.  Now that the new FCA regime is in place, perhaps they need to take time to listen to the industry.

Robert Sinclair
Chief Executive, AMI.


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