Advisers face further Keydata levy

28 April 2011 8:00 am | By Natalie Holt

Advisers may face the prospect of another Financial Services Compensation Scheme levy in relation to Keydata claims.

FSCS levies are raised in April with funds coming into the scheme at the beginning of July, meaning that levies cover the yearly period to the end of June.

The FSCS says that depending on the levy amounts and the levels of compensation, refunds and recoveries by June 30, the intermediary sub-class may face a further interim levy if there is not enough money to pay Keydata claims as at the end of June.

An FSCS spokeswoman says: “We cannot say what will happen until June. There are a few elements at play - the amount that was levied, what was paid in compensation, what has been refunded and what is recovered.

“As we do not know the final figures for all those elements, it is too early to say if any extra funding would be required. We will know closer to the time.”

The FSCS announced an interim £326m industry levy in January, mainly to cover the cost of Keydata claims. Advisers had to pay £93m towards these costs and fund managers £233m.

Philip J Milton & Company managing director Philip Milton says: “The industry will be horrified to hear there may be another significant payment.”

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