The UK's watchdog, the Financial Conduct Authority (FCA), has said fees from the advisory sector will rise by 1.6% for the financial year 2020-21.
The rate is being frozen at 1.6% for smaller advice firms, the FCA announced today. The overall levy increase for adviser fees remains below the average rate of inflation for 2019.
The total contributions from advisers will reach £80.7m, the regulator confirmed. The overall the budget for the FCA is increasing by 2% YoY to £548.5m.
We recognise the challenges facing financial services firms, so we are taking action to protect smaller and medium sized firms from the burden of regulatory fees."
The FCA said in a statement this morning: "The rates on the most common charges have not changed since our predecessor body the FSA."
The regulator is proposing advisers pay £2.1m towards money guidance, a rise of 4% YoY, and £4.9m towards pensions guidance, a 12% rise YoY.
Charles Randall, the FCA's chairman, said: "The coronavirus has added to the challenges already facing the FCA and it is more important than ever that we can deliver our objectives this year."
Randall added: "But we also recognise the challenges facing financial services firms, so we are taking action to protect smaller and medium sized firms from the burden of regulatory fees."
"We are particularly concerned at the moment about retail investments and the harm caused by fraudulent and high risk illiquid investments and this year we will prioritise helping consumers make better investment decisions. We recognise that markets change and evolve quickly - the greatest source of harm today, may be less acute in the future," added Randall.
Keith Richards, chief executive of the Personal Finance Society, commented: "The FCA continues to recognise the financial pressure being placed on advice firms and the proposed freezing of minimum fees for many small firms as well as limiting an increase of the overall levy by 1.6% for the A13 advisory arrangers, dealers or brokers group."
"It is also good to see the regulator consulting on a communications and information campaign to tackle areas where they see real risk of consumer harm."
Richards added, "We believe it is time for a united consumer campaign rather than a regulatory warning against scams or the sign-posting of FSCS, as this alone may further erode the public's confidence and trust in the sector, and could further push them into the path of fraudsters."