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FCA pushes FSCS consultation paper back

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The FCA is set to release its consultation paper on Financial Services Compensation Scheme funding a month later than anticipated, Money Marketing understands.

Those close to the review say they expected the consultation to be launched in November, but have now been told to expect the proposals near Christmas. A policy statement with final proposals is likely to be released in mid-2017 with any changes coming into effect for the 2018/19 fee year.

One source close to the review said the FCA had taken more time to deliver its consultation as more alternatives for reform were suggested by stakeholders, particularly about how professional indemnity insurance and the FSCS work together.

The source says: “There’s going to be a wide consideration of all options when we do have a consultation…It’s encouraging now that they seem to have listened since [the start of the review] and become more open to the broader issues that need to be considered.”

A separate review of PI cover is due to begin in early 2017 but another source did not expect a recently-touted suggestion that PI bills could be combined with FSCS bills in a centralised fund would feature in it.

The source said: “If PI was stronger and covered more at outset, then this should reduce down the need for FSCS, but I would be surprised if it was done away with in its entirety.”

Some industry stakeholders remain optimistic about the outcome of the FSCS funding review, however. Money Marketing understands from sources close to the discussions that the review could see 20 to 40 per cent reductions in advisers’ FSCS bills.

An FCA spokeswoman said the regulator could not comment on the consultation until it had been released.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Elsewhere we read that Burns Anderson’s PI insurers rejected claims in respect of recommendations made by Michael Royde to invest in overseas property schemes on the (alleged) grounds that the risks hadn’t been properly disclosed. Should the FSCS become, effectively, an industry-wide PI insurer, how will it cope with this sort of scenario?

  2. Hmmm, four weeks before pension freedoms industry given the final rules by the regulator and expected to implement. Regulator takes years to even look at FSCS and then gives years to their friends to implement. Funny old world.

    This highlights how the system really works.

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