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FSCS investment claims set to halve in 2015/16

The Financial Services Compensation Scheme expects claims against investment intermediaries to halve in 2015/16 as claims relating to Catalyst and Arch cru drop off.

The FSCS says its annual levy for 2015/16 will be set at £287m, a 4 per cent increase on the total levies so far in 2014/15 of £276m.

In an announcement today ahead of the publication of its plan and budget, the FSCS says new claims against investment intermediaries will reduce from 10,325 in 2014/15 to 5,353 in 2015/16.

It says claims against Catalyst Investment Group and Arch Cru appear to be coming to an end. However, it says other types of investment claims will continue in “steady volumes”.

The FSCS says it expects an 8 per cent reduction in the total volume of new claims next year, from 28,108 in 2014/15 to 25,590.

It says this is down to an expected fall in the number of claims relating to payment protection insurance and mortgage endowments.

However, it says it expects to see a “significant” increase in compensation costs arising from advice to transfer pensions into self-invested personal pensions.

FSCS chief executive Mark Neale says: “FSCS is there for consumers when firms fail. It makes a valuable contribution to consumer confidence as a result. During 2015/16, we will again come to the aid of thousands of consumers when firms go bust.
 
“We take our accountability to levy payers very seriously. That’s why we publish our plan and budget.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. So, given that the fee tariff data form is back, I adjust our income for life and pensions down and add it to investments which since it is advice we could justify.
    For God’s sake change the FSCS levy, make it simpler and recognise advice across product areas.

  2. I’m all for consumers being protected against rogue traders or even investment schemes that fail, but the ombudsman scheme should not be a right to compensation just because an investment has fallen in value.

    Like many I am little bit fed up of claims management firms like Neglect Assist and others putting adverts in newspapers and on TV claiming that you can get compensation just because your investment has dropped. It just goes to show that even with all of the key features documents, illustrations, risk profiles and not forgetting suitability letters, that a claims management firm can say that we not explaining risk. Could it be that we need a judge or ombudsman to be brave enough to say that clients were provided with documentation and the fact that they chose not to read it or listen during interviews is their fault. Responsibility has to be taken by the consumer just like in any other transaction.

    I also personally believe that advisers should have the right to be able to claim compensation from claims management firms that encourage clients to make bogus claims as we have seen in the car insurance claims industry there is a vested interest in a company making up information particularly when there is no comeback. I’m not saying that there should be any comeback on the client but I am saying that there should be a comeback on the claims management firm for costs. It may encourage claims management firms to do better research and advertising before bringing such claims if they knew that they were liable for costs in the event of a bogus claim

    As we have seen in the car insurance industry, whiplash claims drove up premiums and if something is not done about claims management firms the same will be said for financial and legal advice.

    It’s interesting that some of the people disqualified from financial services are now finding jobs in the claims management world surely the ban should be for both sides of the industry.

  3. FSCS chief executive Mark Neale says: “FSCS is there for consumers when firms fail. It makes a valuable contribution to consumer confidence as a result. During 2015/16, we will again come to the aid of thousands of consumers when firms go bust. “We take our accountability to levy payers very seriously. That’s why we publish our plan and budget.”

    Oh Mark what a knight in shinning armour you are !! and what a load of crap and spin, can I say you come to the aid of no-one, all you do is raise money from the good to pay for the bad; a Robin Hood in reverse

    Time to stop blowing sunshine up your own rear and be honest with investors/consumers (as that’s where the money comes from) and say sorry you are being charged so much but the bad and feckless just keep getting away with it, also the chancellor keeps putting his hands in the till, and your bills keep going up as a result.

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