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Aifa calls for consultation to calculate FSCS refunds

Aifa has called for a Financial Services Compensation Scheme consultation on how money recouped from Norwich & Peterborough Building Society for Keydata investors should be refunded to levy-payers.

N&P last week agreed to pay £57m to Keydata investors, including repayments to the FSCS for compensation that has already been paid out to N&P clients.

The FSCS said this may have implications for firms that have contributed towards the £326m levy, raised mainly to cover the cost of compensation related to Keydata unit Lifemark. Advisers contributed £93m and fund managers paid £233m.

Aifa director general Stephen Gay says: “The rules are clear that this money should reduce the levy on the industry but we believe it is ambiguous at present as to how this refund sho- uld be allocated.

“We are therefore calling on the FSCS to formally consult on how and to whom this money should be refunded. Advisers have been hit extremely hard by the recent levy. The FSCS has an opportunity to ease the burden on firms.”

But Philip J Milton & Company, which saw its interim levy rise from £6,009 in 2010 to £51,459 this year, says there is no need for consultation.

Managing director Philip Milton says: “I would think it is quite easy to work out. The FSCS should be able to cal- culate the amount of the interim levy that relates to Key- data and then calculate the amount that relates to N&P customers. I do not think there is a need to consult, it is a case of doing the maths.”

Evolve Financial Planning director Jason Witcombe says: “I would have thought that the amount the FSCS has overbilled for would be a simple amount to calculate.”

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