LEASING brokers could be facing “a significant” increase in fees for regulated firms, while a new flat fee is proposed for each Appointed Representative (AR) on a broker’s books, says the BVRLA.
The proposed new changes are:
- A significant increase to the fees paid by consumer credit firms to create greater alignment of minimum fees charged to other authorised firms in the ‘A’ fee-blocks. Currently their minimum fee is £1,151, whilst consumer credit firms’ minimum fees are £106.
- A new £250 flat fee introduced for principals for every Appointed Representative on their books to account for the further work that the FCA needs to do on the Appointed Representative regime.
The FCA is concerned that principals had an insufficient oversight of ARs with inadequate controls following a review of the general insurance sector in 2016 and the investment management sector in 2019.
It appears that the FCA is assuming that its findings in the insurance sector are indicative of all AR regimes, and the BVRLA will be making clear that this is not the case. Furthermore, the timing of these significant hikes in fees could not be worse as consumer credit firms have not yet recovered from the impacts of COVID-19 where significant payment deferrals were offered by motor finance firms. We will be recommending that the FCA looks to achieve this alignment of fees over a much longer period of time.
Amanda Brandon, director of fleet services, BVRLA
The FCA is currently consulting on these new charges and the BVRLA is requesting the views of BVRLA leasing broker members.
Ralph Morton is the leading journalist in the leasing broker sector and editor of Broker News, the website which provides information and news for BVRLA-registered leasing brokers. He also writes extensively on the fleet and leasing market in both the UK and Europe.
