View more on these topics

FSCS levy hike backlash throws doubt on FCA supervisory control

Piggy-Bank-Savings-UK-700x450.jpgThe FCA may not have taken enough stringent analysis to determine why its incoming £240m levy for the pension and investment intermediation class is necessary, says Pimfa.

The adviser trade body has spoken out against the 2019/20 levy proposed this week in the Financial Services Compensation Scheme’s budget.

The levy – set to cost advisers £175m – is part of £516m in levies predicted to hit the sector in the 2019/20 financial year.

Pimfa says the levy will upset advice business profits and forecasts just eight weeks out from the end of the financial year.

There also limited evidence to suggest the FCA is proactively seeking a way to mitigate claims against bad advice, it says.

Pimfa director of regulation Ian Cornwall says: “Urgent work needs to be done to prevent failure of firms that leads to calls on the FSCS. The levy is a major burden cost on all firms large and small and is considered by firms to be a cost of regulation – the current levy of levies is unacceptable and not sustainable.”

Outgoing FSCS chief executive Mark Neale said on Wednesday that the lifeboat fund was struggling to keep pay outs rolling in line with expectations.

Companies which fail to provide specific information to the FSCS continue to compromise its abilities to gather data to process claims, he added.

Cornwall says Pimfa remains against the watchdog’s stagnant approach to weeding out bad apples in the industry.

“The FCA’s approach must be more proactive in quickly taking action to address the root causes of the claims that result in these unsustainable levy increases.”

Recommended

Money-Cash-Coins-GBP-Pounds-UK-700x450.jpg
106

How much are advisers charging for pension transfers?

Defined benefit pension transfer charges are being put under the microscope again as the regulator turns over more potential conflicts of interest. With the British Steel Pension Scheme the latest to dominate headlines and the FCA ready to interrogate further as it extends its review to include all firms authorised to give pension transfer advice, […]

Brewin Dolphin makes another hire in planning push for high-net-worths

Discretionary manager and financial planner Brewin Dolphin has made another hire as it looks to expands its newly opened advice proposition for high-net-worth clients. Brewin has brought in Furqan Sheikh from Canaccord Genuity Wealth Management to bolster its fledgling office in St. James’, London, which now has 27 staff. The new office opened last year, […]

Tapering of annual allowance – adjusted and threshold income

The definitions of adjusted income and threshold income used to determine whether, and to what extent, someone’s annual allowance will be reduced can be confusing.  Here we try to make sense of it all. The annual allowance will be reduced for high income individuals from 6 April 2016.  Our previous article Tapering of annual allowance […]

neill macgillivray
2

Neil MacGillivray: Why the pension world should welcome CDCs

These schemes retain some of the benefits of DB and DC, while addressing the downsides of each The Pension Schemes Act 2015 introduced the concept of collective benefits. Under pension schemes providing such benefits, a member’s retirement income is determined by the total value of the assets held by the scheme at the point of […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

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

  1. Nothing new here. An ever increasing number of commentators (not just me) have been saying for years that the FCA needs but has consistently failed to regulate in a proportionate and appropriately targeted manner so as to live up to its (empty) claims to secure an appropriate degree of protection for consumers and to protect and enhance the integrity of the UK financial system.

    But it just hasn’t happened, has it? The “limited evidence” that the FCA is “proactively seeking a way to mitigate claims against bad advice” suggests that it’s doing far too little far too late. Umpteen motorway pile-ups have already happened right under the FCA’s nose whilst it was resolutely looking in the wrong directions.

    And just what “way” is it proactively seeking? The solution is staring it in the face, starting with a root and branch reform of its useless GABRIEL/RMAR system with a view to identifying and then homing in on the industry’s bad apples.

    There are, as the saying goes, none so blind as those who will not see.

  2. It is an inevitability when there is no legal long stop on advice. Each year a business trades is PI goes up, until it either can self insure or has to close as at retirement no one wants to undertake the liability.

    It is also frustrated by unregulated investments being covered via SIPP’s advised by advisers. This is simple, stop unregulated investments being covered full stop, or set up an additional permission, with a separate levy. In this way advisers such as our business do not have to pay for others greed, as we do not recommend unregulated investments. For this to work there would need some minor changes, VCT, EIS and property purchase via pension would need to become regulated.

    Non of the above will change as there is no appetite from the regulator, as clients would actually not have a get out of jail cards and see their savings stolen.

    Finally, the rule of law needs to be introduced to the FCA, contract law.

    I know this all seems harsh, but consumers need to wake up, take some responsibility for their own greed and lack of investigation.

    I agree the GABRIEL/RMAR information is not used effectively. This should highlight companies and individuals putting clients at risk.

    • It’s advice ~ on any type or class of investment ~ that’s regulated and thus within the scope of the FSCS, not products. Any consumer who takes and pays for advice from a regulated firm is entitled to expect such advice to be suitable and, if it isn’t, to be afforded the appropriate regulatory protections. Only those who decide to abjure regulated advice and make their own investment decisions are responsible for the outcome.

  3. Sorry to say this, but we work in a regulatory vacuum that Mr Dyson himself would be proud of !
    It constantly sucks the life out of us, both financially and by destroying our moral
    The good just keep getting punished for the wrong doing of the bad

    The FCA will just keep hoovering with all the gusto of a Texas tornado sucking up all in its path and and throwing it to the 4 winds

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com