View more on these topics

Huge FSCS fee rise is looming as endowment claims rocket

IFAs face a massive increase in Financial Services Compensation Scheme fees due to a predicted threefold increase in endowment complaints.

In January, the FSCS forecast 7,000 endowment claims for 2005/06 but now says it exp- ects to receive 22,000 new claims in the period.

It is warning IFAs that the surge means another major increase in fees in 2006/07.

The FSCS received 10,000 new endowment claims in the first six months of the financial year 2005/6 and expects to be handling similar levels next year. Chief executive Loretta Ming- hella says: “New endowment claims have been received at unprecedented levels, way beyond our expectations.”

Advisers could have to pay an additional levy to cover this year’s shortfall although the FSCS, which is hiring new staff to cope with the increased volume, says this is unlikely as it will only happen if the shortfall exceeds 25 per cent.

Aifa director general Chris Cummings says the astronomical rise in endowment claims increases the pressure on the FSA to restructure the way that the FSCS is funded so product providers share the burden for endowment misselling.

Cummings says: “This has brought the problem of FSCS funding into sharp focus. Providers, who are still making money from these policies, have to step up to the plate.”

Pensions Transfer Solutions managing director Carl Melvin says: “It is a crazy situation and is going to drive more IFAs out of business.”


The route to compliance

Compliance expert Adam Samuel says the FSA wants the key elements of minimum acceptable compliance to be found in every business

SVM global to appoint Senator as chairman

SVM global investment trust has announced it is to appoint Senator Shane Ross to succeed Simon McClean as chairman of the company. Ross, who is currently deputy chairman, is to succeed existing chairman Simon McClean. The trust will hold its annual general meeting on December 13. The trust, which released its results today for the […]

MM reporter Salmon wins B&B award

MM regulation reporter James Salmon won Scoop of the Year and was runner-up in Trade Journalist of the Year at this year’s Bradford & Bingley Press Awards. He won Scoop of the Year for his story in May about Tony Blair’s attack on the FSA in a speech to the Institute for Public Policy Research.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    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 advice.

    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