The Association of British Insurers has clashed with IFAs after opting to maintain the current funding system for the Financial Services Compensation Scheme despite advisers being crippled by massive fee increases.The draft response to the funding review, which is yet to be consulted on by ABI members, will recommend minimal change to the present regime and rule out provider subsidies to advisers. It will reject option B, which is backed by the FSA, the FSCS and IFA bodies, designed to recognise the mutual responsibility of advisers and providers by placing them in the same levy group according to product class. The ABI will call on the FSA to tighten capital adequacy requirements on advisers to reduce the number of firms going into default and dumping liabilities on to the compensation scheme. Money Marketing understands that the ABI is also calling for asset managers and mortgage brokers to pay more to the compensation scheme. The revelation has prompted a fierce backlash from advisers who have seen their FSCS levies almost double over the last two years. Sources close to the ABI say the hard-line stance has also angered some members, who are prepared to pay more to help their distribution channel. Aifa director general Chris Cummings says: “This is very short-sighted and an attempt to stall the consultation process. The rise in claims on the FSCS is not mainly due to poorly capitalised firms going into default but complaints against firms that retired legitimately about mortgage endowments that providers are still making money from.” Personal Finance Society public affairs director John Ellis says: “If providers want an advice distribution channel, they should think again about sitting back and watching advisers being wiped out.” SimplyBiz chairman Ken Davy says: “There is not a scrap of honourable defence to maintaining the current system which is grossly unfair to the IFA sector.” ABI spokesman Jon French says: “We believe that the current system is working well and that any changes that are made should be minimal. Any suggestion that we are trying to stall the consultation process by presenting our views is far-fetched.”
The Mortgage Business Expo takes place in Manchester this week involving 130 lenders, packagers, technology and legal companies, networks and clubs.The free event takes place at the Manchester G-Mex on 17th and 18th May with a seminar programme including CML director general Michael Coogan, Nationwide group economist Fionnuala Earley and Abbey chief economist Barry Naisbitt.Chairmen […]
Norwich Union and HSBC have entered the pension term assurance market. NU has launched life insurance with tax relief and mortgage life insurance with tax relief on level and decreasing terms. HSBC has set up life cover with tax relief and mortgage cover with tax relief.
Norwich Union has confirmed that it will launch its Norwich UK special situations fund on May 22nd.The 200m fund will be jointly managed by Richard Buxton, manager of Schroder UK alpha plus fund, and Andy Brough, manager of Schroder UK mid 250 fund.The fund will be available from IFAs and fund supermarkets and will hold […]
The Prime Minister and Chancellor appear to have reached agreement to restore the earnings link to the basic state pension signalling an unlikely but peaceful end to the pensions soap opera that has been raging since the second Turner report.
By Douglas Turnbull, head of Chinese Equities, Neptune The 19th Party Congress is coming up late in 2017. During years of bears waiting for China’s challenges to turn critical, policymakers in Beijing have made meaningful steps to address them, and we believe will continue to do so. Even as growth is slowing, it is rebalancing […]
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The Government should consider allowing people to lower their contribution rates to 8 per cent under auto-enrolment to prevent a potential spike in opt-out rates over the next few years, AJ Bell says. Contribution rates are due to rise to 5 per cent in April this year and 8 per cent in April 2019 with […]
French asset manager Carmignac has called for more clarification on the new research costs rules under Mifid II as it claims rival firms have wrongly stated what the directive means for their business. Speaking to Money Marketing after an event in Paris, Carmignac managing director Didier Saint-Georges referred to asset managers as “cheeky” in their […]
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