Practising fees rocket as FSA sets out new structure

FINANCIAL SERVICES: number of staff to determine costs

Law firms carrying out mainstream investment business are facing a major hike in practising fees as the Financial Services Authority (FSA) assumes regulatory control of them, it has emerged.

The new fee structure is based on the number of individuals involved in financial services activities, even if - as with many legal practices - such advice forms only part of the individual's time.

The lowest fee payable to the FSA is 1,160, while a firm where five solicitors are involved in financial services could pay more than 3,500.

There is a sliding scale thereafter.

Previously, regulation by the Law Society cost 210 a firm plus 70 per principal.

However, the legal profession has taken the news on the chin, saying the FSA gave prior warning of fee hikes.

Heather Martin, chief executive of the Association of Solicitor Investment Managers (ASIM), said: 'The fees are no great surprise.

We have had constant dialogue with the FSA and they told us what was coming so we were prepared.'

Alison Crawley, head of professional ethics at the Law Society, said: 'It isn't fair to compare the charges previously paid by firms with those now charged by the FSA, as the Law Society regulated all firms whether they were carrying out discrete investment business or not.

'The firms which weren't heavily involved in financial services were paying slightly over the odds; therefore those who were knew they had a good deal.'

Around 230 law firms are now regulated by the FSA.

Andrew Towler