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FSA/PN/083/2005
25 July 2005

Around 1,600 small firms have already taken advantage of a new scheme that lets them pay their fees by instalments according to new figures from the Financial Services Authority (FSA). Earlier this year, the regulator brought together the Small Business Practitioner Panel (SBPP), Financial Services Compensation Scheme (FSCS), trade associations and credit providers to provide a suitable plan for firms who would like the option to use such a facility to pay their fees and levies.

Graeme Ashley-Fenn, Director of Contact, Revenue and Information Management, comments:

" The fact that over 1,600 firms have already taken-up the scheme at this early stage in the invoicing process shows it is already a success. Our goal in setting-up the instalment deal was to offer firms greater flexibility to manage their finances. The popularity of the instalment plan demonstrates that our efforts were worthwhile."

The launch of the instalment system followed the FSA's consultation with the industry in January 2005 to gauge the level of interest for payment of fees and levies by instalments, and whether any credit provider would be interested in operating such a credit scheme.

The FSA organised negotiations between a number of credit providers, representatives from the SBPP and FSCS, and trade association representatives from the Association of Independent Financial Advisers (AIFA), Association of Mortgage Intermediaries (AMI), British Insurance Brokers' Association (BIBA), Institute of Chartered Accountants in England and Wales (ICAEW) and Institute of Insurance Brokers (IIB) on 28 April 2005. A unanimous agreement to provide the FSA with a single payment, whilst offering a facility for firms to spread this cost using payment by instalment, was reached.

Premium Credit Limited have guaranteed "auto-acceptance" to all FSA authorised firms, and a competitive package for a payment period of ten months, (although repayment periods can be flexible if required). The trade associations within the industry working party have negotiated a more favourable rate for trade association member firms.

Notes to editors

1. The FSA sent information and application forms concerning Premium Credit Limited's instalment plan to 21,800 out of around 25,800 firms that the FSA regulates together with their fee invoices for 2005/06.
2. The FSA is aware that other credit providers exist who may wish to provide individual firms with a similar service to Premium Credit Limited. As a result the FSA, whilst not endorsing Premium Credit Limited over other credit providers, has agreed to publicise the company as the unanimous choice of the Trade Associations for 2005/06 regulatory fees and levies.
3. The FSA had already assessed that it was not effective to provide instalments itself, due to the additional costs required to set up such a scheme, the fact credit provision is not one of our core competencies and that due to the tight time-frames, it would be unlikely this could be available for payment of the 2005/06 fees and levies. In addition, any such costs would inevitably have to be passed back to all firms, which seemed unfair on those firms which chose not to participate.
4. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
5. The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.