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Investment advisers face £108m FSCS levy

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Investment advisers are to pay £108m to the FSCS levy in the coming year, with the total industry levy rising to £363m.

Life and pensions intermediaries will pay £80m in the 2016/17 financial year.

The FSCS says the hike for life and pension intermediaries is due to the increasing number of claims for people wrongfully advised to move their personal savings into a Sipp.

The body also sees a rising number of claims for people who have seen investment losses after being advised to put assets in “risky, non-standard assets such as overseas property development”.

Mark Neale, chief executive of the FSCS, says that as a decision has not been made about whether these investors will get compensation, the levy for life and pension intermediaries could rise.

The current figures, published in the FSCS’s plan and budget for 2016/17 released today, are estimated, with final levy figures to be released in April.

Figures are worked out based on a three-year average with the annual fee determined for each year.

“Overall, we’re moving towards streamlining our claims, reducing management and operating costs, which benefits our levy payers, and creating a better experience for consumers,” says Neale.

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Comments

There are 15 comments at the moment, we would love to hear your opinion too.

  1. So if I put all clients’ investments into investment bonds instead I would pay a lower fine? Stunning logic.

  2. Tim tim@pagerussell.co.uk 19th January 2016 at 9:15 am

    Not necessarily Paul, it depends over how many firms those different levies are spread and how much business each firm did. I’ve given up trying to estimate my firm’s bill from these headline numbers. I just budget for at least 10% on top of last year’s bill…

  3. Another news site reports a completely different set of figures, namely £108m for investment advisers and £80m for life and pension intermediaries with a total industry levy of £363m.

  4. Its almost as though we are being provoked into revolution. This system stinks. I suggest the powers that be buy a ticket (using their own money) to a screening of “The Big Short” and reflect on how they expect to contrinue to get away with blaming and punishing the wrong people.

  5. Surely both advisers and SIPP providers are providing returns to the regulator about product sales. I fail to see how they are unaware of companies operating like this. Surely regulating and preventing these sorts of sales very early on in the process cannot be that difficult. If it is just change the rules for SIPPs. Meanwhile the rest of us pay up like muppets.

  6. Libertatem is campaigning for this to be a charge on Investments. There are 16m potential FSCS claimants and 6m consumers currently taking advice and therefore paying this levy.

    Join Us Fund Us http://www.libertatem.org.uk/PAR

  7. Or, Paul, fiddle your Fee Tariff data…… It is pathetic and everyone at FSCS should be embarrassed. How they can take their salary…

  8. Is it just me or does this mean the FSCS think there are going to be a pile more advisers going out of business in 16/17 if they are putting this levy on? If this is correct then considering how close we are to the new CA requirements coming in, does it not prove the FCA have wasted their time and our money oaths new higher requirement? If I am incorrect then why is the FSCS putting this levy in place?

  9. While still stupidly high, I believe that this is a 20% reduction for life and pensions intermediaries when compared with last year (pre-interim even!). Is this correct please?

  10. What a depressing way to start my days work. Not surprised though, I just spent a year battling with a complaint about HSBC via FOS and it was clear that the system is there to punish the individual and support & protect the banks that fund them. It is getting to the point where I want to joint the revolution, make a placard and head toward FCA headquarters…..Picket line anyone!

  11. The FOS are largely to blame here, as they seem institutionally biased in favour of complainants, and make ridiculous awards against regulated advisers even when the eventual SIPP investment advice was given by an unauthorised adviser into an unauthorised investment.
    Just wait until the Claims Management Companies really get going and swamp the FOS with more and more vexatious claims where the IFA has no right of appeal.
    It’s about to get worse and there is nothing we can do about it.

  12. “Overall, we’re moving towards streamlining our claims, reducing management and operating costs, which benefits our levy payers, and creating a better experience for consumers,” says Neale. TRY MOVING OUT OF LONDON!!!!

  13. Lee Tomkins you are so right. Middlesbrough would be a good option. There’s no shortage of sites in a lot of Scottish towns. Likewise Port Talbot in South Wales. What about moving it to one of the towns that’ll lose out on the steel jobs? There is absolutely no reason for the FSCS to be based in London.

  14. Who approves their budget and gives them permission to take this amount from the adviser community without being subject to having to justify their costs?

  15. The solution could well be that if its regulated advice you’re covered. The KFD has a statement showing that you’re covered and a cost that you pay to be covered by the FSCS as a consumer. No “kite mark” no payment for cover and no being paid out.

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