The Financial Conduct Authority has confirmed it will raise its funding requirement for Financial Planning firms by 8.9% to £94.6m in 2023/24.

This is a £7.8m increase year-on-year for block A.13, which includes most Financial Planning firms.

Last year saw a 5.6% rise.

There are currently 11,040 firms in block A.13, a 5.2% drop from 2022/23 (11,651).

According to the data from the FCA, the 11,040 firms remaining saw a 9.8% rise in annual income to £38.9bn.

The regulator said its total annual funding requirement (AFR) would rise 8.1%. The total AFR for 2023/24 has risen by £50.9m to £681.8m (2022/23: £630.9m).

This will be offset slightly by a 6.3% rise in the financial penalty rebate to £52.5m.

Fees payable will rise 8.2% year-on-year to £629.3m (2022/23: £581.5m).

Despite the rise in overall fees payable, the regulator confirmed that it would continue to freeze minimum fees, flat rate fees and application fees.

The FCA said that there was “strong support” for holding down the fees for 2023/34 and no objections to the proposal.

The regulator added that it expects to return to inflationary and staged increases to these fees from next year.

The FCA acknowledged that some respondents to its fee consultation were concerned about the increasing cost of regulation.

The regulator said: “We are conscious of the overall cost of regulation and seek to manage our resources effectively. We are freezing minimum fees, flat rate fees and authorisation fees, to support in particular small and developing businesses. However, we are – like all organisations – facing higher costs. These increase the resource needed to manage ongoing activity. Additionally, we have an expanding remit and require resource to manage, among other things, the policy implications of transferring retained EU law into our Handbook.”

Financial Planning firms can use the FCA’s online fees calculator to calculate their individual fees based on the final rates published this morning. The calculator includes FCA periodic fees, Financial Services Compensation Scheme levies and Financial Ombudsman Service fees. 

The FCA will invoice fee payers from this month for their 2023/24 periodic fees and levies.