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FSCS investment adviser levy set at £78m

FSCS-office-alternative-2013

The Financial Services Compensation Scheme has set the final levy for investment advisers for 2013/14 at £78m, up from the earlier estimate of £76m.

The increase in the investment adviser annual levy comes despite the overall FSCS levy falling 8 per cent from an indicative levy of £311m to a final levy of £285m. Investment advisers are the only funding class to see their levy increase compared to the indicative numbers published in February.

The £78m annual levy for 2013/14 comes on top of a £20m interim levy on investment advisers for 2012/13.

Life and pensions advisers have seen their annual levy fall 24 per cent from an indicative £17m to a final £13m. Fund managers are not being levied for 2013/14.
 
The investment adviser levy is to pay for claims relating to the collapse of MF Global, spreadbetting firm Worldspreads and Pritchards Stockbrokers. It also covers the cost of claims relating to Arch cru, following the introduction of a consumer redress scheme this month which will allow clients to opt in if they want their advice to invest in Arch cru reviewed.
 
FSCS chief executive Mark Neale says: “Although we are pleased to announce a levy that is £26m less than originally projected, we are aware of the impact that our levies have on firms. In particular, we are mindful of the fact that, in addition to this levy, firms in the investment and insurance intermediation classes recently received invoices in respect of the interim levy we announced in March.
 
Firms will be invoiced for the annual FSCS levy in July.

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Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. It would be interesting to know how much that actually works out per the average adviser – if you divide 78 million by 23,000 you get £3,391 per an adviser ouch

  2. “The investment adviser levy is to pay for claims relating to the collapse of MF Global, spreadbetting firm Worldspreads and Pritchards Stockbrokers. It also covers the cost of claims relating to Arch cru” – all the fault of investment advisers NOT!

  3. With the rises in FSCS levy it could put firms out of business, increasing the need to raise FSCS levies that ill then need to be paid by few advisers.. Has anyone really thought this through. RDR is proving to be a poison challace and before anyone one says that it means more business fro those of us that are left, the whole point of RDR was to reduce consumer detriment. all it has managed to do is protect the few at the cost of the many.

  4. Unsustainable.
    If clients want protection, they will have to pay for it.

  5. Anonymous | 19 Apr 2013 8:34 am

    all it has managed to do is protect the few at the cost of the many.

    and your point is!

  6. MF Global delivered trading and hedging solutions across all major markets for futures and options,commodities,fixed income,equities and foreign exchange. Not an IFA.

    The executives of WorldSpreads led customers to believe that the company’s share price would rise and encouraged them to enter into so-called “long bets” on the shares through the company, according to sources. This was despite spread-betting firms being prohibited from giving financial advice. Not an IFA.

    Pritchards Stockbrokers were…..stockbrokers. Not an IFA.

    And as for ArchCru………

    So why should I, as an IFA with no right of appeal, be forced to pay towards compensating the customners of those firms? This is yet another example of the need for an Independent Regulatory Oversight Committee with the power to force the FSCS to revise the way in which it allocates its compensation bill. As things presently stand, the FSCS is free merely to declare This is what’s been decided so pay up or pack up and we don’t care what you or anyone else might have to say on the matter. That’s plain wrong.

  7. Maybe we should involve the police – after all the actions of the FSA/FCA/FSCS are nothing short of extortion which I always thought was illegal.

  8. Julian makes some intereting points but an oversight committee would not force the compensation scheme to change the classes of firms. This is set by the regulators, not the FSCS. How we declare our business also affects which class we land in.

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