View more on these topics

ABI warns providers over FCA plans for FSCS levies

FSCS-Piggy-Bank-500x320.jpg

The Association of British Insurers has warned its life and pensions members they could soon face Financial Services Compensation Scheme levies if the FCA goes ahead with plans for providers to contribute for adviser failures.

The ABI regulation team recently met the FCA to talk about the FSCS funding review. An ABI note, seen by Money Marketing, says the FCA is considering merging the intermediary classes and having providers contribute automatically for intermediary failures.

The note says: “This responds to the FAMR report’s recommendation to reduce the size and volatility of the cost to intermediaries of their failures. Such an outcome would be disappointing, even though the FCA’s modelling suggests that the cost to insurers would not have been high had this new basis applied in recent years.”

It adds that life and pension providers would face FSCS compensation levies for the first time in “very many years”.

The FCA’s public consultation into how the FSCS is funded is expected in Q4.

Several meetings with trade bodies have taken place ahead of the consultation. A product-based levy was deemed out of scope of the review in early discussion despite Apfa and the Personal Finance Society favouring this option.

Recommended

Mark-Neale-at-office-in-2014-700.jpg
16

FSCS boss sees ‘significant issues’ with product levy

Financial Services Compensation Scheme chief executive Mark Neale has questioned the viability of a product levy to fund the scheme, citing “significant issues” with the concept. A review of the FSCS funding model was recommended in the Financial Advice Market Review. Speaking to Money Marketing after the release of its annual report today, Neale explains: “One […]

8

PFS urges Osborne to intervene over FSCS product levy

The Personal Finance Society has written to the Chancellor to press its case for a product levy to be considered as part of the Financial Services Compensation Scheme funding review. The professional body wrote to George Osborne this week setting out its concerns about the current “unsustainable” FSCS funding model. PFS chief executive Keith Richards […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Typical, What a surprise !! Yet again the regulator does not listen to the various trade bodies that represent the industry and still go ahead with what will be an unpopular and again unfair option for all concerned. A Product levy is the fairest for everybody, it enables providers and intermediaries to stay in business and the cost is absorbed over the people who are using the services, although the biggest problem still remains compensating stupid people who go to unregulated advisers without checking them out first and take out unregulated and dodgy rip off schemes expecting to get rich quick ! Things that sound exceptionally attractive rarely are and the idiots of this world should be allowed to pay for their own stupidity not bailed out by a nanny state regulator, at our expense !!

    • Sofia de Sousa e Silva 15th August 2016 at 9:34 am

      Dennis, if the adviser is not regulated, the customer was a victim of a scam. In these situations they don’t receive compensation from the FSCS.

  2. The ABI regulation team recently met the FCA to talk about the FSCS funding review. An ABI note, seen by Money Marketing, says the FCA is considering merging the intermediary classes and having providers contribute automatically for intermediary failures.

    But, hey ho is fine and dandy for advisers to pick up the tab for all sorts of failures that had nothing to do with us. I’ve been paying FSCS levies for advice given by unregulated advisers and products that were supposed to be self invested. I’ll remind you of what a SIPP is supposed to be and thanks to Hargreaves Lansdown for the information. Self Invested Personal Pensions are transforming the way people are saving for retirement – putting them in control of their financial future and giving them the freedom to select the investments they think will deliver the best returns. Except when it all goes wrong someone else picks up the bill.

  3. “A product-based levy was deemed out of scope”.

    Then why not call it a tax the, after all IPT was introduced with no consumer benefit at all, in fact quite the opposite as insurance products cost more as a result.

    At least the consumer would see a benefit with a tax on the premiums doing something for them.

    Just a thought!

  4. And when you see IPT added to your PII bill it makes you rather unhappy. I have said for a long time, invoice the client and add a tax like IPT so that advice and product and ongoing services are covered. Also, if done carefully, gets around an issue where some firms are declaring some income as fees for unregulated activities….

  5. This is all just another distraction. No matter how you spin it, the general public pay for all of this. They pay the banking fines, the PPI payouts, the industry levies for you name it through the charges placed on them via these maligned institutions.

    The insurance companies, brokers and banks etc are purely the payment route to the Quangos large payrolls, self interest and meddling nothing more. If only the general public could grasp that they pay for the self preservation society to play god and award their money to whoever strikes the FOS jackpot of gold.

Leave a comment