The news that fees for mortgage broker firms under the Financial Services Compensation Scheme (FSCS) have been cut for the duration of the coronavirus pandemic has been welcomed by the industry.
Confirmation of a reduction in these fees during the crisis came via the latest newsletter issued by the FSCS, which states that they have fallen to £1 million, which is a drop of £2 million. It has been greeted warmly by the Association of Mortgage Intermediaries (AMI), with the chief executive of the organisation, Robert Sinclair, telling FT Adviser that it was to be welcomed during a period when many firms are struggling for working capital.
He went on to say that, while the AMI was pleased that small mortgage broker firms are being given a period of 90 days to cover these charges, the organisation felt that the standard 30-day period for companies with fees of more than £10,000 was not long enough.
According to FT Adviser, Sinclair concluded by saying:
“Whilst delighted that firms will not see a real increase in their total fees and levies costs this year, we remain acutely aware of the challenges faced by firms and the interrelation between capital adequacy requirements, PII, FOS and the FSCS costs.”
Earlier this month, the Financial Conduct Authority (FCA) stated publicly that there would be no review of the FSCS and that bigger companies would not be given longer to pay, despite the pandemic.
This is at least partial good news for these companies and the advisors with a CeMAP qualification that work for them.