Advisers report huge increases in FSCS bills
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Advisers have reported staggering increases in their annual Financial Services Compensation Scheme bills, by as much as 756 per cent.
Firms are facing a sharp hit to their profits as the FSCS has today shared out the £93m cost to intermediaries of its interim levy, which mainly covers the failure of Keydata unit Lifemark. Last year’s FSCS interim levy is £80m.
But neither the FSCS nor the FSA could provide an explanation of the scale of the rises reported to Money Marketing.
Philip J Milton & Company managing director Philip Milton [pictured] says his bill was £6,009 last year but today’s bill is 756 per cent higher at £51,459.
He says: “We are not a fund manager in the sense of selling funds and we never promoted a single Keydata product or structured product. It is disgraceful.”
Informed Choice chief executive Nick Bamford says his bill has shot from £1,300 last year to £10,012 today - a 670 per cent rise.
Bamford says: “These IFAs that recommended Keydata are commission-grabbing gits and we are paying for it.”
Skerritt Consultants has seen its bill more than double from £11,000 to £25,100.
Head of investments Andy Merricks says: “We are clearly not happy as it effectively means we have become victims of our own success.
“Keydata and the like are products we had nothing to do with and we are basically subsidising the miscreants of the industry. I wonder who is paying for the latest FSCS ad campaign?”
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Readers' comments (45)
Rod | 25 Jan 2011 5:23 pm
Another nail in the coffin of the IFA, how long are we all going to put up with it?
We are not a bottomless pit,
about time we all withheld contributions untill those who cause the problems pay their way. IE who Licenced them to Trade yep the FSA.
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Anonymous | 25 Jan 2011 5:28 pm
It IS disgusting - no other industry that I can think of makes the good guys pay for the acts of the bad ones - however, when there was an opportunity to fight a legal campaign on the Keydata issue how many of the companies now moaning about fees actually contributed to the fight. I understand that only about 200 companies were involved, nationwide - that is also a disgrace!!!
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Mark B | 25 Jan 2011 5:28 pm
This is pretty hard to swallow and is so unjust especially if you have never recommended Keydata or anything like it. The FSA are to blame for their ineptness in monitoriring, but as usual their "get out of jail for free" card (just hit the industry with an extra levy) is being overused.
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Anonymous | 25 Jan 2011 5:29 pm
Likewise not sold any Keydata products and have always put our clients first and yet we have to pay for the transgressions of those 'others' who have profited from their incompetance. Not fair and no other professional body has to put up with this type of unlimited liablity / cost
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Incompetent Regulators Awards Team | 25 Jan 2011 5:31 pm
Sounds like a bargain and very fair to IFAs!
P S To Martin Bamford my firm operates both fees and commission choices for clients. So we give proper choices to consumers unlike RDR proposals. RDR is only one symptom of bad FSA regulations and thats what'll your get if you appease the regulator.
You might want to re-think what comes out of the FSA in future!
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Anonymous | 25 Jan 2011 5:34 pm
Is there any other business that can go back to it's customers after issuing fees and say " Sorry we have had a bad year, can you send me more money to cover my costs). What a fantastic position to be in.
What the FSA and FSCS are doing is an absolute disgrace and totally unfair on all the good honest advisers who are having to pick up the bill.
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Michael Fallas | 25 Jan 2011 5:38 pm
Given WE pay the FSA to stop such situations if they were not protected under the FSMA 2000 from any wrong doing we may well had had a claim against the FSA.
What is the point of regulation if it fails us all again and again?
We pay huge costs to the FSA and then we pay again when they fail.
We should not have to pay twice just to protect the consumer.
It may well be cheaper to protect the consumer alone rather than pay the FSA as well as they add no value at all.
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Gerry Cooper | 25 Jan 2011 5:45 pm
Like other posters, I find it more than a little irritating that, despite being suspicious of Structured Products in general, and being unwilling and isufficiently stupid to touch anything involving Life Settelements at all, I have to meet this appalling and unjust levy increase (450% in my case).
However - at present, the decision to recommend, or not to recommend, this product, is mine.
Post 31/12/12, if I choose not to consider this type of product, or indeed others, and reflect this in my Key Facts and Customer Agreement, I will be classed as a Restricted Adviser.
I assume that thereafter, I shall be exempt from any FSCS levy in respect of products and activities from which I have excluded myself?
Assuming that the FSA have considered this, and are indeed capable of telling their arse from their elbow, I would be interested to have their confirmation, or am I being naive?
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Anonymous | 25 Jan 2011 5:47 pm
Could someone plesse tell me where the vast monies from the Fines re RBS and Barclays are going? Who is benefiting from these monies and why can't these monies be used to offset some of the KeyData comoensation.!!!!!
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Anonymous | 25 Jan 2011 5:47 pm
Could someone plesse tell me where the vast monies from the Fines re RBS and Barclays are going? Who is benefiting from these monies and why can't these monies be used to offset some of the KeyData comoensation.!!!!!
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