One IFA has recently announced it will be raising the charges its partners are levied due to significant increases in FSCS bills and professional indemnity insurance costs.
Aegon-owned national IFA Positive Solutions will institute the new fees from July 1 of this year. For those who bring in less than £50,000, the firm will begin retaining an additional 5 per cent of that income, resulting in an increase to 35 per cent.
Those partners earning more than £50,000 but less than £70,000 will see a 2 per cent increase from last year’s 25 per cent fees due to rising professional liability insurance costs. Those earning up to £90,000 will likewise see their old 20 per cent fee rise by two percentage points as well.
Higher-earning partners are also in line to be affected by the changes brought about by increased business liability insurance costs. Previous to the fee increase, partners that earned in excess of £155,000 were not subject to a charge by Positive Solutions, but now any partner earning as more than £90,000 and less than £175,000 will see their earnings levied at a rate of 6 per cent. Even those who earn more than £175,000 will see a 1 per cent charge.
The firm’s partners are still reeling from last year’s costs increases, as the IFA raised its retention thresholds by £5,000 throughout its entire business. This had left partners with no choice but to find more income than they had in previous years in order to reach a higher earnings band in order to retain a higher percentage of profits.
Jim Reeve, chief executive for Positive Solutions, stated that the firm had no choice but to increase its fees due to the increase in the costs of regulation.