Wheatley: No prospect of 'regulatory dividend' for advisers

Such a move would be seen as giving some firms "an easier ride", FCA chief executive Martin Wheatley said on Thursday.

Speaking at the regulator's annual public meeting in London, he said the idea advisory firms should pay less in regulatory fees and be subject to softer supervision because they have improved their professionalism and therefore pose less risk of a risk to the wider industry, is not something the FCA can consider.

In fact, the regulator has "banned [the phrase 'regulatory dividend'] from our lexicon", Wheatley said.

Last year, APFA drew up a list of concessions for advisory firms it asked the regulator to commit to, in order to make the system fairer for advisers.

The list included a loosening of reporting requirements, the introduction of a long-stop and a reduction of regulatory fees.

But Wheatley said: "The regulatory dividend concept was something that fell out of favour because it was seen as us somehow giving firms an easier ride to the system, whereas our view is that all firms have to live up to the standards and they are all contributing to the cost of providing a regulated market."

He added: "We try to run as tight a ship as we can within the very, very broad range of responsibilities that we have, and therefore we tried to limit the additional resource that we will need each year.

"Our costs are not recovered from the [bad firms] as the Chancellor has decided our fines are quite an attractive source of income for the Exchequer, so that's no longer a means that can offset our total cost."

Wheatley also admitted at the conference the regulator has run into difficulties with its work on examining the re-introduction of a long-stop for advisers.

A European directive on alternative dispute resolution to be introduced next year, may have implications for its project, he said.