In a paper published this morning, the FCA said that increasing the fees would act as a barrier to market entry and would help “redress the balance of cost recovery” away from existing fee-payers.

If its proposals had been implemented in 2019, the regulator said it would have seen funds from applications increase from £6.2m to £12.8m, a rise of 103%.

In 2019 application fees covered 33% of the cost of authorisations at the regulator, under the new system this would have been 67%.

However, the proposals to increase applications fees would still not recover the full cost of processing applications. Under the proposed system, the consultation paper said 20% of the cost would be passed to existing fee-payers via periodic fees.

Application fees for new firms seeking authorisation were last reviewed in 2014.

In the paper, the regulator said that a review of application fees has been long overdue: “Many of our charges have not changed since our predecessor, the Financial Services Authority (FSA), set them nearly 20 years ago. Over that time, their value has eroded, passing an increasing share of the processing costs to existing fee-payers.”

The FCA has also proposed introducing fees for changes in control and applications permissions under the Senior Managers Certification Regime.

There is currently no charge for this but advisers submitting applications to the FCA under Seniors Manager Certification Regime (SMCR) may be required to pay £250 per application from June although this has not been confirmed.