The FCA is proposing switching its fee for principal firms of appointed representatives (ARs) and introducer ARs (IARs) to a variable fee from a fixed one.

The move would “better reflect” the costs it needs to recover from firms, the regulator said.

It currently charges a flat fee of £289 for an AR and £87 for an IAR.

The flat-rate fee for principal firms was introduced in 2021/22, when it was set at £250 per AR and £75 per IAR.

Under the variable fee model, all firms typically pay a minimum fee but larger firms pay a variable fee on top, the regulator said.

In a consultation paper published on 29 November entitled ‘Regulatory fees and levies: policy proposals for 2025/26’, the FCA said: “We propose to replace the flat-rate fee model with a variable fee model to make sure we recover the revenue we need.”

It said the change would reduce the risk of over or under recovery of cash from firms but they would not mean be charged vastly different amounts.

The FCA said that although a flat-rate fee rate provides greater consistency for firms, “if the variable-rate model had been in place this year, the fees paid by individual principal firms would have been the same or close to the fees they actually paid.”

It said it would retain ARs/IARs as the tariff base, adding that the flat rate per IAR is currently 30% of the charge per AR, to reflect the fact that IAR activities are limited and pose a lower risk of harm.

The regulator reviews and consults on its fees rules annually, consulting in November on changes to its policies on how it raises fees and levies.

The consultation applies to FCA fee-payers, Ombudsman Service and FSCS levy-payers, and to any businesses considering applying for FCA authorisation or registration.

The regulator has asked for comments on the consultation paper by 24 January. Comments can be via on the FCA’s website or in writing to: Fees Policy, Financial Conduct Authority, 12 Endeavour Square, London E20 1JN. Email: This email address is being protected from spambots. You need JavaScript enabled to view it..