The FCA has proposed a new way of funding the Money Advice Service (MAS) which will see advisers hit with a 63% increase in costs next year and a total MAS bill for 2014/15 of £4.4million.
Under the proposed rules adviser fee block A13 will be merged with block A12 before a new block, A21, is formed in April 2014.
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The move will cut regulatory fees by reallocating advisers who have permissions to hold client money and administer assets to different fee blocks, which mean a reduction in fees for most advisers of about £4 on every £1,000 earned.
According to the proposals, would come into effect from April of next year fee block A13 will be the home of advisers who do not hold permissions for holding client money or assets, whereas A21 will be the new block for those holding those permissions.
The proposals estimated that advisers in fee block A13, who are currently paying £6.89 per £1,000 of income, will pay £2.84 per £1,000 of income and the A12 block will pay a fee of £2.39 for every £1,000 of income.
The FCA said that advisers in the A13 fee block would pay £1.2 million based on the usage method and £3.2 million based on the levy method, which gives a total MAS levy of £4.4 million for 2014/15, up from the £2.7 million in 2013/14.
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By GlobalDataThe consultation closes on 6 January 2014.
The FCA said: "Setting up a new fee-block clarifies our cost recovery. It ensures that firms taking on client money and assets permissions pay more than those that do not. It also removes the distinction between A12 and A13, bringing all the investment intermediaries into one fee-block, so it has the additional advantage of simplifying our cost recovery from this group of firms. We are proposing that the Money Advice Service (MAS) would follow the FCA model.
"Overall, across the two fee-blocks, 44% of firms would have seen no change, 43% would have seen a decrease and 13% would have seen an increase," FCA added.
