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