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FSCS won&#39t allow IFAs to pay huge increase in instalments

The Financial Services Compensation Scheme has ruled out any chance of IFAs paying their levy in instalments this year but admits it had been an option.

The FSCS says it considered the possibility of allowing firms to pay the increased levy in instalments but it was ruled out for being too costly.

IFA firms have reacted angrily to the hike in charges, which coincided with the caping of the Pass fees product provider supplement. Many IFAs are struggling to meet bills that have gone up by thousands of pounds.

The FSCS can allow firms to pay in instalments but it would have to discuss the situation with the FSA, which collects the levy, and then have it authorised by the FSCS board.

As a result of the fiasco this year, the FSCS is giving serious consideration to opening negotiations with the FSA over an instalment process for next year.

Communications executive Suzette Brown says the FSCS looked at the possibility of instalments this year but that discussions with the FSA never went ahead because the instalment process was considered too costly.

She says: “It is too late for payment in instalments to be implemented. It has to be done in discussions with the FSA and approved by the board and we decided not to go ahead this year. It is something we are looking at for next year. We are aware of the situation that exists and we will be looking at that.”

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