The industry is waiting for the FCA to announce its budget and fees for the next financial year but advisers are already aware of the yoke being placed around them in the form of the Financial Services Compensation Scheme levy.
The pain felt last year in the life and pensions class will be visited again, with the scheme handling more claims in relation to near worthless investments advised for Sipps.
While the industry must stand behind the FSCS, the costs for the activities of some unscrupulous individuals are significant. It is particularly wrong mortgage brokers are being levied for these costs as most had no knowledge of what was being done.
I understand why investment advisers are not putting up their hands to take full responsibility for their sector but it does beg some interesting questions.
Mortgage advisers are now also being levied for cases where introducers were advising on buying into foreign property schemes by borrowing against the customer’s UK property on an interest only basis. These deals were rarely real and the losses now fall on honest firms.
The challenge for the industry is in how to stem the tide of claims. It is right to firstly look to the FCA to shut these firms down quicker. All firms pay for the regulator and have the right to expect prompt and efficient action.
At the same time, the FCA should reasonably expect that where firms see these risks emerging they tell the regulator. Without information from the market it will often surface too late. But suspicion should be enough; it is down to the regulator to look and prove.
Robert Sinclair is chief executive at AMI