Some firms, especially sole practitioners, could see a ten-fold increase in the cost of being authorised to offer investment advice to their clients.
Roger Purcell, a chartered accountant and compliance specialist, said the FSA fees would be a major burden for accountancy firms. ‘Many firms may be forced to withdraw from investment business,’ he said.
Before the so-called ‘N2’ regime at the FSA came into existence, a sole practitioner would typically have been required to pay £155 to the ICAEW, one of the professional bodies that previously regulated accountancy firms.
But now the smallest fee payable to the FSA is £1,160, and a firm with five individuals registered with the FSA could face a bill of more than £3,500.
The FSA defended the hike in registration costs, saying they reflected the additional work required from the authority.
‘It was always going to increase, and the fees will not have come out of the blue,’ a spokesman for the FSA said.
But he added fees could be discounted to ease the transition.
The ‘N2’ regime was introduced last October – firms had a choice of registering with the FSA if they wanted to be able to offer clients financial investment advice, or remain registered with their institute or association acting as a designated professional body if their services were not considered ‘mainstream’.
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