Advisers have attacked Treasury financial secretary Mark Hoban, who has claimed that firms will be grateful for cross-subsidisation of the Financial Services Compensation Scheme if their sector faces significant losses.
At the Treasury select committee evidence session last week into competition in the banking sector, Hoban said: “It is very easy to say, my sector should not be hit now for the levy because it is not my problem, but the time may come when it is a member of that sector who has to pick the bill and they will be grateful for some of the cross-subsidisation on offer.”
Informed Choice managing director Martin Bamford, who has set up an IFA action group for fairer FSCS costs, says Hoban’s comments are “extremely disappointing.” He says: “It is clear Hoban wants to wash his hands of any responsibility for this broken system.
IFAs who previously gave him their support in the recent Parliamentary debates on regulation of independent financial advice are likely to be rethinking their position as a result of his comments. He is alienating a large part of the IFA community who never sold the investment products giving rise to compensation claims.”
Highclere Financial Services partner Alan Lakey says: “Hoban’s comments are the kind a person makes when they do not understand a situation. It is not a case of whether we should pay or not. There are more fundamental issues at stake, such as whether there should be a product levy instead.”
Yellowtail Financial Planning managing director Dennis Hall says: “The problems with the FSCS are just not on Hoban’s agenda. He is more concerned with setting up the regulator as a consumer champion.”