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Blow for advisers in bid to cut FSCS levy

IMA and CML both refuse to back proposals to subsidise IFAs

Advisers’ hopes of reducing their contributions to the Fin-ancial Services Compensation Scheme have been dealt a blow after the IMA and the CML both refused to back proposals to subsidise IFAs.

With less than three weeks until the June 21 deadline for submissions to the FSA’s consultation paper, the Council of Mortgage Lenders and the Investment Management Association have both declined to give their full backing to advisers.

The CML says it has yet to make up its mind while the IMA says it favours the status quo although its adds that it has not yet been given enough information to draw any concrete conclusions.

The news comes after the ABI revealed last month that it wants to maintain the status quo. It rejected option B of the funding review, backed by the FSCS, the FSA and IFA bodies, which proposes to place advisers and product providers in the same levy group according to class of business.

The ABI drew criticism for its hard-line stance for ignoring the plight of advisers crippled by rising FSCS levies.

CML spokesman Bernard Clarke says: “We are still consulting with members as part of the process and we are likely to be responding to the consultation paper.”

IMA spokeswoman Mona Patel says: “Before we commit to any options, we would like to see some numbers, as the FSCS have not told us how much each option will cost our members.

“At the moment, the status quo looks like the most reasonable way.”

Affluent Financial Planning managing director Carl Mel- vin says: “Providers say they want to help IFAs but when it means putting their hands in their pockets, they do not want to know.”

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