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ABI move to set up loan scheme to pay FSCS levy

The ABI is believed to be in talks with the FSA over a loan sch-eme to enable IFAs to pay Fin-ancial Services Compensation Scheme fees in instalments.

The ABI is negotiating with the FSA over establishing a loan service that intermediaries can dip into to pay the FSCS levy.

Officially, the ABI says there is no change to the situation regarding payments to IFAs. Providers volunteered to pay an extra 1.5m to the FSCS this year in addition to the 3m paid in the last three years.

There have been calls for the FSA to allow IFAs to pay in instalments but the regulator is known to be reluctant to allow this since it would mean the unprecedented move of applying for credit status. How-ever, it is thought that some deal may be struck offering a preferential rate of interest.

When the FSCS levy was increased last year, many IFAs struggled to meet the extra cost. This was combined with the closure of the Pass scheme which provided subsidies for the levy.

It is thought that another solution would be to get the FSCS budget approved at an earlier stage so that firms would have seven to eight months to save for the levy.

ABI spokesman Leonie Edwards says: “There is nothing more to say about the situation other than that prov-iders have recently agreed to pay an extra 1.5m to the FSCS this year. This was in addition to the 3m given in the last three years. That is the situation as it stands.”

The FSA declined to comment.


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Strong dollar can be a powerful driver of UK dividend growth in 2015

By Robin Geffen, fund manager and CEO 

This year threatens to be a challenging one for UK dividend hunters. Last year saw an all-time record amount paid out in UK dividends — some £97.4bn, according to research from Capita Dividend Monitor. Yet as Capita also pointed out, out the biggest single factor driving the growth in the fourth quarter of last year was easy to identify: the rising US dollar. 

In our view, this trend is much more than simply a one-quarter phenomenon. It is actually the most profound issue to get right as a UK equity income investor in 2015. We believe that the US dollar will continue to strengthen significantly from its current level. This is due more to the US economy’s demonstrable de-coupling from the rest of the world than to a view on the UK. The US has a strong chance of tightening monetary conditions this year without jeopardising growth or de-stabilising its housing market. The same can unfortunately not be said about the UK.


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