PIMFA voices disappointment at fee approach for Appointed Representatives

25 May 2021

PIMFA voices disappointment at fee approach for Appointed Representatives

PIMFA, the trade association for the wealth management, investment services and financial advice industry, has voiced its disappointment at recent proposals put forward in the Financial Conduct Authority’s (FCA) fees and levies consultation for Appointed Representatives (AR).

It is of some concern that the FCA has introduced a flat fee for firms without justification or evidence of the issues that it is seeking to address. PIMFA is also concerned that this has been subject to an extremely brief consultation period, which has been presented as a fait accompli to firms.

It is the view of PIMFA that the proposals put forward in this consultation directly penalise firms which are, in theory, best placed to have effective supervisory models of their Appointed Representatives.

Larger firms who have an extensive network of ARs tend to have invested a significant amount of money in their systems and controls and are, by virtue of their size and scale, subject to enhanced supervisory oversight. To this end, the fixed fee approach taken by the FCA is flawed.

Simon Harrington, Senior Policy Adviser at PIMFA commented: “It is extremely disappointing that the FCA has taken these steps to ask firms to contribute an additional £10m to the regulatory pool without articulating exactly what that money is for. More broadly, the decision to, in effect, presuppose the outcome of the work programme – the specifics of which remain undefined – is something of a departure from previous market studies that the Regulator has conducted.

“If the FCA believes that ARs drive significant consumer harm, it would be good to see how and the ways in which additional funding – predominantly from large, well supervised firms with huge investment in their own controls and systems – will go about addressing this.”

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About PIMFA – the Personal Investment Management & Financial Advice Association

• PIMFA is the trade association for firms that provide investment management, investment services and advice to everyone from individuals and families to charities, pension funds, trusts and companies.
• The sector currently looks after £1.65 trillion in private savings and investments and employs over 63,000 people.
• PIMFA represents both full and associate member firms. Full members provide a range of financial solutions including financial advice, portfolio management, as well as investment and execution services. They assist everyone from individuals and families, to charities and pension funds, all the way to trusts and companies.  Associate members provide professional services to the PIMFA community.
• PIMFA leads the debate on policy and regulatory recommendations to ensure that the UK remains a global centre of excellence in the wealth management, investment advice and financial planning arena. Our mission is to create an optimal operating environment so that its member firms can focus on delivering the best service to clients, providing responsible stewardship for their long-term savings and investments.
• PIMFA has made numerous recommendations to the FCA regarding the Future of Advice, the Future of Supervision, & the FSCS levy – read more.
• PIMFA was created in 2017 as the outcome of a merger between the Association of Professional Financial Advisers (APFA) and the Wealth Management Association (WMA) with a history as a trade association since 1991 – read more.
• Further information can be found at pimfa.co.uk

Contact

For further information on this release or other press matters please contact:

Matthew West, PIMFA PR Manager – MatthewW@pimfa.co.uk, +44 (0)20 7382 0376

Sheena Gillett, PIMFA Communications & PR Director – sheenag@pimfa.co.uk, +44 (0)20 7011 9869 / +44 (0)7979 493225