Sesame offers interest-free FSCS interim levy payment plan

11 February 2011 11:27 am | By Nicole Blackmore

Sesame is offering members an interest-free payment plan for the Financial Services Compensation Scheme interim levy, which will spread the payments over two years.

In January, Money Marketing revealed the FSCS is charging a £93m interim levy on advisers. The levy includes FSCS compensation costs of £86m, mainly to compensate Lifemark investors, and management expenses of £7m.

Investment advisers have also seen their annual levy double to £40m in 2011/12.

This is the first time that Sesame has offered its members a two-year payment option, which will incur an administration charge of £35. The network is in the process of writing to members with full details of the options available.

The FSA allows advisers to use the Premium Credit instalment arrangement, set up to pay FSA fees, to spread the cost of FSCS levies. It charges an interest rate of between 7.5 per cent and 9 per cent, dependent on trade body membership.

Managing director of distribution Nick Kelly (pictured) says: “The substantial additional FSCS levy is a body blow to advisers, given the economic and regulatory pressure that firms are already under right now. Sesame is responding by using its financial strength to alleviate the pressure on our members.

“However, what we also urgently need is a fairer long-term solution for how these FSCS fees are allocated across the financial services industry in the future, as the current trend of fewer advisers sharing the burden of higher fees is simply unsustainable. We are challenging the FSA and FSCS on the way the levy is structured in the pursuit of a fairer long-term solution.”

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