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Advisers say FSCS interim levy move ‘delaying the inevitable’

Advisers say the Financial Services Compensation Scheme’s decision to delay its £30m interim levy for investment advisers will create greater uncertainty for the profession.

The FSCS had planned to raise an interim levy on investment advisers in 2013/14, largely as a result of claims relating to the failure of life settlement firm Catalyst. 

But in an announcement this week, the FSCS said the processing of claims against Catalyst had been delayed, meaning the majority of costs are likely to fall in the 2014/15 financial year.

Philip J Milton & Company managing director Philip Milton says postponing the “inevitable” could cause more problems for advisers.

He says: “This creates more disorder and from a cashflow perspective is unhelpful as firms do not know what provision to put in their end-of-year accounts. 

“We know it is still going to be payable so they might as well get on with it.”

MFP Wealth Management chartered financial planner Justin King says: “This is good news but I want the FSCS to tell us what the levy will be for next year. We need to know in advance to plan our business.”

Holden and Partners partner Steven Pyne says: “This is merely delaying the inevitable. The levy is coming whether people like it or not so it still has to be budgeted for.”

FSCS chief executive Mark Neale says: “New information on the volume and timing of claims suggests we do not need to levy the industry for more money during 2013/14. That is good news for firms.

“We still expect claims relating to Catalyst during next year. 

“We will update the industry when we have more information on what this change means for 2014/15 when we announce the levy in April.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Soren Lorenson 6th March 2014 at 5:35 pm

    Why is a life settlement firm the responsibility of IFA’s anyway?

    That’s the most compelling question.

  2. Never do today what you can put off until tomorrow, by which time you will probably have twice as many problems…

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