The FCA is proposing to increase its minimum and flat rate fees, as well as application fees, by an average 8.75% which could mean Financial Planners facing an overall hike in charges of 4.9%.

The increases are part of a consultation announced by the FCA today on its regulatory fees and the levies it collects for the Financial Ombudsman Service and government.

Consultation paper CP24-6 consults on the FCA’s fees and levies for 2024/25.

The FCA’s funding requirement for 2024/25 is £755m, a total it set out in its business plan published in March. It said its regulatory activities budget had increased by 8.75% and that its proposal to increase minimum and flat rate fees was in line with that.

Different types of financial firm in different sectors will face a range of fee increases, depending on the FCA's calculations of how much regulatory burden each sector is responsible for.

The FCA explained: "We distribute recovery of costs between fee-payers by putting them in fee-blocks. These group together firms with similar permissions. We allocate costs between fee blocks to align them broadly with the costs of regulating those activities and each year we adjust the allocations to reflect additional work that we are undertaking with those groups of firms."

According to Financial Planning Today’s understanding, those firms listed by the FCA as “advisors, arrangers, dealers, brokers” – likely to include Financial Planners – are set to face a 4.9% increase.

By comparison corporate finance advisers will face a fee increase of 25.3%. Meanwhile general insurers are facing a 13.8% hike while life insurers’ fees are set to be raised by 8.6%.

The FCA said the proposed fees increase was justified by the work it will undertake over the next year.

It said: “We have been given powers to undertake a significant review of assimilated European law, to ensure our rules work better and contribute to UK competitiveness.

“We also have an ambitious programme of work to deliver over the year ahead, including finalising far-reaching reforms to the listing regime and supporting people’s long term financial wellbeing through the Advice Guidance Boundary Review.

“Furthermore, we are adapting to a growing remit, for example this includes greater oversight of crypto-assets and their promotion.”

To help firms assess the impact of the proposals, the FCA has provided an online fees calculator which will enable them to estimate their fees for 2024/25.

The FCA is asking for comments on the consultation paper by 14 May. The consultation applies to all FCA fee-payers and to any businesses considering applying for FCA authorisation or registration. The FCA said the fees will be finalised in July, pending its consultation.