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Categories:Advisers,Regulation

Advisers face £30m annual FSCS levy, plus possible £40m interim levy

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Advisers are facing a Financial Services Compensation Scheme annual levy of £33m for 2012/13.

The FSCS has today published its plan and budget for the next year, alongside the FSA’s consultation on fees and levies.

The investment intermediation sub-class faces an annual FSCS levy of £33m, out of a total annual levy of £221m.

The levy relates to compensation clains for Keydata, Wills and Co and Arch cru. However the levy does not include likely compensation claims for MF Global.

Advisers could face a further interim levy of £40m before the end of March in relation to MF Global claims. The FSCS warned in December that compensation costs for Arch cru and MF Global could go above the £100m adviser sub-class limit and trigger a cross-subsidy for fund managers.

It is unclear whether advisers will also have to cover the cost of compensating US investors affected by the collapse of the failed investment brokerage.

FSCS chief executive Mark Neale (pictured) says: “Our accountability to our stakeholders and our commitment to keep costs to a minimum remains a key priority for us. A major focus for us in the coming year will be to pursue recoveries from major failures in order to reduce the costs on the industry.

“The existence of FSCS and its ability to respond to unpredictable workloads contributes to financial stability. That is why it is important for FSCS to invest in order to enhance its capacity to deal with large or multiple failures.”

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Readers' comments (12)

  • MAS - im an ex F2F adviser for this service worked for £18k salary giving advice mostly to those on benefits - helping with basic budgeting. I really don't see where all this money is being spent.

    Alot of the guys doing F2F are advisers who have come out of the regulated industry.

    How this being handled on the top level sitting in Canary Wharf is a complete joke. There really needs to be some form of regulation around how funded organisations actually spend money.

    I'm sorry but there is no way the CEO's at FSA, FOS MAS can justfy those salaries. They are taking money from some hardworking IFA's who probably earn less than 30k pa and spending it like no body's business. It's because of people like this this country is in a mess.

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  • When are IFAs going to have to pay compensation to bank account holders who are not being told to switch their cash ISAs to newer high interest accounts and other bank failings.

    I consider it totally unfair on the FSA for not blaming all the IFA community for this obvious miss selling.

    While I'm at it I really think it's great that the yanks can claim compensation from us for a contract they couldn't get legally in their own country. Maybe the FSA should really help the rest of the world get compensation from all of the british IFA community and then they would then finally have ackeived their aim of killing off our industry.

    By the way I am not writing this from the lunatic asylum known as the Financial Services Authority but from our local asylum where I am going to be receiving electric shock treatment to try and bring me back from my fantasy world - oops I've just been told the treatment is cancelled - i'm not mad, it's all true!!!

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