IFAs are outraged by a Financial Services Compensation Scheme £70m levy on investment advisers to cover the failings of Keydata Investment Services and two stockbrokers.
Claims from Keydata will cost advisers £43m while failed stockbrokers Pacific Continental and Square Mile will cost £27m.
On top of this, advisers are likely to be hit with a further £20m levy for claims relating to structured product providers NDF Administration, Defined Returns and Arc Capital and Income.
Norwich & Peterborough Building Society has thousands of clients invested with Keydata and so far has 139 FSCS claims relating to Keydata. N&P could not confirm whether it is categorised under both the deposit and investment intermediation FSCS sub-classes and whether it has to pay any of the bill.
Vintage Financial director Geoff Hartnell says: “Norwich & Peterborough sold Keydata plans over their own counter. I have been giving free advice to a number of their customers because they have not been able to get any advice from the person behind the counter in their local branch. They have an equal level of responsibility for rolling up their sleeves and getting involved in order to assist investors.
“There is no doubt the part of the levy which is paid by the IFAs is disproportionately high based on our resources. It should be spread equally.”
Baronworth Investment Services director Colin Jackson says: “Why put the additional levy on the IFA community? It seems grossly unfair. Generally speaking, IFAs were not to blame.”
Mike Jordan Financial Management IFA Mike Jordan has submitted a petition to the Prime Minister which is pending approval, calling for a review of which sub-classes the levy should fall on, calling it “unfair and unaffordable”.