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Fund managers worst hit by new £31m FSCS bill

Mark Neale
FSCS chief executive Mark Neale

The Financial Services Compensation Scheme is imposing a new £31.3m levy on fund managers and investment advisers following recalculations of the interim £326m industry levy for 2010/11.

Fund managers will have to pay £31m, while £300,000 will come from investment advisers.

The interim levy was triggered in 2011 by claims mainly relating to Keydata.

Advisers were forced to pay £93m and fund firms £233m.

Advisers and fund managers saw significant increases in their FSCS levies as a result, which prompted firms to resubmit the tariff data on which their levies were based.

The FSCS has now finished calculating which firms overpaid and underpaid their contribution to the interim levy, and has paid rebates to firms that overpaid.

A total of 394 investment advisers and 566 fund managers will receive a levy invoice. The FSCS says around half of the 960 firms will be billed between £50 and £1,000. A further 285 will get invoices ranging from £1,000 to £10,000.

Four fund managers will receive invoices for over £1m, while 78 will receive invoices of more than £100,000.

The FSCS is not imposing a levy against firms who owe less than £50, as the costs of doing so would be disproportionate.

FSCS chief executive Mark Neale says: “This levy will close the tariff data resubmission and the 2010/11 interim levy truing-up exercise.”

Clearwater Financial Planning managing director Duncan Carter says: “The reallocation of the interim levy is clearly good news for advisers, but the FSCS funding model is fundamentally flawed and needs to be reformed.”

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