Last week we had our latest Financial Conduct Authority (FCA) notice of fees. This includes our levy to the Financial Services Compensation Scheme (FSCS) but excluding Financial Ombudsman Service (FOS) fees. Last year, this fee was £6,500. This year it is £10,500. That’s a staggering 61% rise in FCA fees.
This week was the turn of our professional indemnity insurers. We have not had any complaints yet again this year and our insurer has not had to pay any compensation claims on our behalf. These costs were £21,000 last year and this year have risen to £31,000. Again, another staggering rise of 47.6%. No doubt to pay for all the rogue financial adviser mis-selling again.
This means, these combined professional fees that we need to pay or we cannot trade, have a combined cost of £41,500 this year, up from £27,500 last year. An increase of £14,000. That is a 50.9% increase in professional fees.
Add to this, of course wage demands, utilities and office costs all going up, means we must consider increasing our fees. Don’t forget, this is not a one off increase, our professional fees and insurance costs never go down.
Weighted Increase %
What Fees Are We increasing?
We usually only increase our fees on average every 6 years. Given these huge increases in costs, we are making some changes early.
We estimate that we are still some 30% to 40% cheaper than most IFAs that offer % upfront and % ongoing fees when compared to our fixed and set fee services.
Perhaps, we are being punished for being able to work continually through the pandemic and look after our clients and staff, pay our staff in full, pay full holiday pay and not claim a single penny in furlough pay support or defer any VAT, income taxes or corporation taxes, in fact we paid more.
Who are the fools? Those that used or abused the system with furlough and grants that are now back open and making a ‘mint’ or those that looked after and continue to look after their clients and staff? It’s a bitter pill we have to swallow.