Aifa director general Chris Cummings says while the Compensation Scheme is a vital regulatory safety net, the basis on which the scheme was funded needed urgent reform.
He says: “Aifa has lobbied for reform on behalf of its members for a number of years and we are pleased with the outcome, which creates a fairer distribution of costs across all parts of the financial services industry. This is a positive step and will be welcomed by our members, many of whom will see a significant reduction on their fees this year. The new levy structure is a clear demonstration of the value of a strong trade body representing its members at a national level.”
Cummings adds that the new structure will see firms’ levies calculated on the amount of income generated from the different classes of business undertaken, not the number of approved persons.
He says: “For most IFAs, this is likely to result in a substantially lower levy, particularly as this year the majority of our members will receive sizeable refunds from the winding up of the old Scheme.”