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Davy keeps pressing for product levy

Simply Biz chairman Ken Davy has reiterated his call for the FSCS to be replaced with a product levy, saying a levy would not be detrimental to consumers.

But the FSA says a levy is wrong because compensation should come from the industry.

Davy wrote to the FSA recently, pushing for a levy. FSA sector leader, retail intermediaries David Kenmir responded to Davy, saying there are no immediate plans to change the operation of the compensation scheme, funded by the industry. He is concerned that a levy would see consumers paying for claims.

Davy says a levy would apply to all products covered by the FOS and would be applied to all providers distributing one or more products via IFAs. He says contributions would be calculated through their share of the IFA market and it would be up to the providers to determine how they meet levy costs, for example, by costing it into products or reducing commission to IFAs.

Aifa has written to the ABI, asking if it would be feasible to implement a product levy.

Davy says: “A product levy would bring no consumer detriment while being seen to be fair to all concerned.

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