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FSCS sets investment adviser levy at £105m for next year

Investment intermediaries face a Financial Services Compensation Scheme annual levy of £105m for 2014/15, the scheme reveals in its plan and budget today.

This is up from an annual levy of £78m for 2013/14, but the FSCS also expects to raise an interim levy of £30m on investment intermediaries before the end of the current financial year, taking costs for 2013/14 to £108m. 

Life and pensions intermediaries face a levy of £40m for 2014/15, up from £13m for 2013/14. 

In 2014/15, financial services firms will pay a total levy bill of £313m to cover compensation and base costs, which compares to total levies so far in 2013/14 of £285m, although this does not include the £30m interim levy for investment intermediaries.

The FSCS expects the overall volume of new claims it receives to be 20 per cent higher in 2014/15 than in 2013/14, at 34,724 compared to 28,052.

It says this will be driven by high volumes of payment protection insurance claims.

The 2014/15 levy is the first to be calculated under the FSCS’s new 36-month funding approach, which it says will reduce the volatility of annual levies and the likelihood of interim levies.

FSCS chief executive Mark Neale says: “Our mission is to provide a responsive, well-understood and efficient compensation scheme for customers of financial services, which raises public confidence in the industry.
 
“2014/15 marks the first time we will calculate the annual levy with our new 36-month funding approach, which we believe will go some way to reducing volatility of annual levies and provide the industry with greater certainty.”

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Comments

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

  1. Wow – isn’t it great to spend other people money. All in the name of ‘improving consumer confidence’. I cannot be the only one who is seriously brassed off with the way this industry is run.

    The time for a product levy is years overdue. However until we get some leadership and vision from the top, we are doomed to this groundhog day ………..

  2. Wow is an understatement. This looks like a 207% increase. That is going to be serious money.

    Ah well the hurdle for entry gets ever higher and a Fosberry Flop may not be sufficient.

    If you thought that RDR culled adviser numbers, just wait till this bill lands on the mat!

  3. WOW and double WOW !!!!

    They can send my bill to the FCA; and they can pay it out of the 118 million that’s owing to us in fee block A !!

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