Advisers have branded the Financial Services Compensation Scheme’s funding model “hopeless” and hit out at having to pay for the “supreme idiocy” of others as they get invoices for the £60m interim levy on investment intermediaries.
The FSCS announced the £60m interim levy for 2011/12 earlier this month.
Claims related to the collapse of MF Global are expected to account for almost £27m. The interim levy also covers claims relating to Keydata, CF Arch cru and Wills & Co.
Jacksons Wealth Management managing director Pete Matthew has seen his interim levy bill rise by 46 per cent from £2,600 last year to £3,800.
He says: “There has got to be a levy system of some kind but the problem with the current system is with the grouping of firms. The investment intermediary sub-class is so broad and covers firms such as stockbrokers and providers that it cannot possibly be construed as fair. It is soul-destroying when we get these bills.”
Informed Choice managing director Martin Bamford says his share of the interim levy has broadly stayed the same as last year at about £10,000.
He says: “This year I have almost gone past the point of being frustrated with the FSCS. Speaking to other advisers, I just get an overwhelming sense of hopelessness about the whole thing. The regulatory structure has become so big and so lumbering that I do not see us forcing change at any stage.”
The FSA says it will finalise its review of the FSCS funding model by the end of September. However, Bamford says he is not convinced it will bring about real change.
He says: “Realistically, I think very little will change following the FSA’s funding review.”
Wishart Wealth director Iain Wishart says: “I am a firm believer in making the polluter pay but that does not happen. Advisers like us who did not get involved with Keydata and Arch cru should not have to pay for the supreme idiocy that has gone on out there.”