IFAs could get cashback as N&P pays out Keydata clients
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Advisers may get money back from their last Financial Services Compensation Scheme interim levy after Norwich & Peterborough Building Society agreed to pay £57m in compensation to Keydata investors.
This week, N&P said it will compensate its Keydata Lifemark clients in full and repay the FSCS for compensation that has already been paid out to its clients.
The FSCS says this may have implications for firms which have paid the interim levy, which was raised mainly to cover the cost of compensation to investors in Keydata unit Lifemark.
In January, the FSCS announced the interim levy of £326m, with advisers paying £93m and fund firms £233m. The adviser levy includes FSCS compensation costs of £86m to Lifemark investors.
N&P is writing to its Keydata clients, inviting applications for ex gratia payments to transfer rights to the investment to N&P. Payments will see the return of the original investment plus interest.
Clients who have previously claimed through the FSCS can still apply for payments through N&P as they may qualify for interest or have a claim above the £48,000 FSCS limit.
The news of the payments follows protracted talks between the FSA, the FSCS and N&P.
N&P chairman Gordon Horsfield says: “The society has been deeply concerned for its customers who have suffered following Keydata’s failure and is very sorry for the hardship and anxiety that has occurred.”
An FSCS spokesman says: “We are considering what this means for levy payers and will liaise with the relevant trade organisations on the issue.”
The FSCS set a precedent in December 2007 when it issued a £40m levy refund to the general insurance provider sub-class after recoveries from failed GI providers and lower than expected compensation payments.
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