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Charles Stanley profits take 20% hit from ‘unfair’ FSCS levy

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Charles Stanley has seen a 7 per cent increase in pre-tax profit, although chairman David Howard has highlighted the “unfairness” of the Financial Services Compensation Scheme’s impact on its earnings.

In its results for the year ending 31 March, the stockbroking and investment management group says profit before tax reached £9.1m – up from the £8.5m in 2012.

In the results, Howard criticises the “unfairness” of the FSCS levy.

Howard says: “We have no control over the size or the timing of demands, nor any say in weeding out the rogue firms who give rise to these expensive claims. In 2011-12 our bill was £1.6m, and in the latest year the figure is £1.9m. This knocks nearly 20 per cent off our reported profit.

“Collectively, across the industry, this is a huge burden for firms and ultimately therefore for the investing public. It cannot be right that failed businesses take a great bite out of the rest of us.”

Charles Stanley’s final results show funds under management and administration increased 14.9 per cent from £15.4bn to £17.7bn, while discretionary funds under management were up 28 per cent from £5bn to £6.4bn.

Presenting his outlook for the coming year, Howard says: “The first two or three months of our financial year, from the first of April, nearly always show an uptick, before things settle back for the summer. But so far the uptick is rather stronger than one might expect.

“It is early days to build our hopes on this for a more sustained recovery, after these long years of stagnation, but there seems to be a sense of things moving forward again.”

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. Roman Duzinkewycz 11th June 2013 at 9:00 am

    Boo Hoo – I’ve said it before – do something about it then and stop whining.

  2. With fewer authorised firms post RDR the FSCS demands will become more onerous for the remaining authorised firms.
    All we need is a couple of large MF Global type companies to misappropriate funds, accounting errors, fraud etc etc and the result could be massive liabilities via FSCS to the remaining authorised firms.
    The good guys pay for the bad guys.

  3. anon@9.04
    why do you assume they are all bad guys?
    It could just be that their latest fscs levy broke the camels back and rendered them unprofitable.

  4. RegulatorSaurusRex 11th June 2013 at 9:45 am

    You signed up for all this so stop complaining.

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