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Law firm rounds up IFAs for FSCS challenge

Law firm Regulatory Legal is garnering the support of IFAs to challenge the Financial Services Compensation Scheme’s £70m interim levy.

The campaign group will analyse the validity of the FSCS’s decision and see if there are adequate grounds look to pursue a judicial review against it. Partner Gareth Fatchett (pictured) says nearly 300 firms have so far signed up to get further information.

Earlier this month the FSCS announced it would be imposing a £70m levy on the 6,500 firms operating as investment intermediaries to pay for claims relating to Keydata, and stockbrokers Pacific Continental and Square Mile.

Keydata was classed in the investment intermediation sub-class for FSCS purposes despite being widely perceived as a structured product provider.

Firms with less than five registered individuals wishing to join the group must pay £200 plus VAT while those with more than five RIs must pay £300 plus VAT. 

Regulatory Legal will assess the group’s viability at the end of the week commencing March 15.  If there is not enough support it will return all monies to firms in early April.   

Fatchett says: “Our firm is dedicated to giving IFA firms the opportunity to challenge the FSCS levy decision.” 

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Comments

There are 39 comments at the moment, we would love to hear your opinion too.

  1. Sorry to be a spoil sport, having experienced the quality of this man’s work I wouldn’t give him my money. I’ve sat in court rooms listening to other cases where it goes above judges heads with no result apart from laywers fees. He’s after the main chance! Try lobbying with MPs.

    IFA for 30 years

  2. Look before you leap folks.

    There is a lot going on behind the scenes that you don’t know about.

  3. Oh dear, another that should be posted on a scamwatch somewhere.

    Here is the pitch, give IFA’s a little hope and take some of their money, when it fails at least they can say they tried.

    My suggestion would be to take all of the money, spend it on some marketing and client development.

    With the money you will earn from this activity you will be able to fund the increase in the levy and with some careful future nurturing of these clients you have just done business with pick up some nice future work.

    The last thing this industry needs is someone else offering hope especially hope that is as vague as this.

    Hope remember is not a plan.

    Richard Smith IFA and Tech Consultant
    http://www.theinternetconsultancy.com

  4. Well done the firms who have signed up to Regulatory Legal’s proposed challenge. Why should advisory firms have to cover the costs of a provider and a stockbroker; it just doesn’t seem reasonable and neither would it happen in virtually all other professions. If Sainsury’s for example went under would Tesco, Morrison’s and Asda have to pay for any compensation claims made against Tesco….I think not. They would take their competitors market share which is exactly what other product providers will do after KeyData’s demise and it is they who should pay an increased levy not the advisers who have recommended their products.

  5. In response to Peter Davies

    If only we lived the same world as every other kind of business.

    Fact is we don’t, and nor will we.

    Back to my earlier point, suggest we focus elsewhere, like a battle that is actually win-able (is that a word).

    Richard Smith IFA & Tech Consultant.
    http://www.theinternetconsultancy.com

  6. I fully support Richard Smith’s comment re the misguided Peter Davies. Fatchet will benevr win for the 2 reasons mentioned above.

    Many of us have been through this before and no longer live in hope but want real results. What a waste of money this should be going to Adviser Alliance as they have IFAs interest at heart and not the main chance!.

    IFA for 30 years

  7. Re Richard Smith and other comments. This is not necessarily about raising false hopes. Every little attack made against Brown’s Bonkers Regulatory system is worth doing in itself – as long as it is done well. If Mr Thatchett chips a bit more off this structure, well done him. And as far as wasting money goes it is entirely down to an individuals judgement whether backing Mr F – or anyone else is a waste of money.

  8. Regulatory Legal/Fatchett are in it to make money. They are not our guardian angels. A2O and FSA Levy. What’s next to make some money on? We should be using our own representative bodies with no extra cost.

  9. Adviser Alliance & Aifa have nothing to say on the matter, which is why Mr Fatchett is taking this opportunity.

  10. I don’t understand this. For the past week I’ve been reading posts by IFA’s feeling (rightly) that they are being tucked up by FSCS.

    Here comes someone prepared to take them on for a relatively modest fee and everyone posts ‘they’re in it for the money’. I realise that Mr F. is no charity but I think he at least gives us a fighting chance.

    An action will also demonstrate IFA’s working together and fighting. We have been a pushover for far to long.

  11. I second Mr Smug.

    I have been looking at past comments from IFA’s when this story initially broke and the overwhelming concensus is that someone should stand up for IFA’s.

    Now someone is and you are moaning??

    I appreciate that your representative bodies should be standing up for you but they appear to have the lack of backbone and will to do anything about this!

  12. I second Pensionman. Stop waiting for some spineless representative to stand up for you and put your hand in your pocket and pay a modest fee, if only to show the powers that be, that we have had enough and that we are no longer willing to be treated like cash cows, whilst the Big Boys do what they like and then get bailed out.

  13. Surely those who are negative about this person should be upfront about it and state exactly what they think the issues are; other than the first poster, who I think criticised the mans delivery in Court, everyones been a bit coy and vague or simply accused him of coming up with a good idea to make money (not a sin as far as I know!).
    So please could the negative posters be precise. And if anyone DOES know of a professional body who is taking this on, or if they have a cast-iron argument to prove the legal action would fail, please also post before hordes of us send our money off!.
    Surely though there is some doubt regarding both the system (which I believe is accepted as flawed and is therefore being reviewed next year anyway?) and about the allocation of levies to particular fee groups – there must therefore be some mileage in some kind of challenge?..and i AM meeting my local MP too…so should everyone.

  14. To Paul

    Trust me I know this man very well and have had 1st hand experience. He is filling a massive void thanks to 2 organisations that did nothing for years e.g. IFADU and AIFA who worked at oppsoite ends of the scale.

  15. Although not affected by these matters I have been taking an interest in the Keydata escapade. I note that the majority of the comments made here appear to be those of IFAs,if I may I would like to make a comment as a prospective investor. If IFAs feel like pulling the rug from underneath the FSCS it will do only one thing and that is push people towards the big-boys ( i.e building socities and banks), you are fast becoming akin to hopping in to a taxi that you know the operators haven’t bothered to insure,it may be worth thinking that before you cut your noses off to spite your face. Barry

  16. Barry,
    Most of the IFAs here do NOT hold client money and so ADVISE their clients towards fairly big boys already (hopefully not banks !!)
    Also, the very fact that you imagine that IFAs could “pull the rug” from the FSCS simply shows how ridiculous a system it is. We represent negligible risk of losing client money (we dont hold any remember) and yet we bear a huge proportion of the costs when failures of that nature occur. Madness.
    And as for us losing your business, if the levies keep on coming we wont even be in business so not an issue.

  17. and I give a third vote to Mr Smug. We can’t keep on rolling over and playing dead!!!

  18. Barry

    What utter rubish. Don’t comment on things you don’t understand!

  19. All,

    1. I do not hide behind anonymous posts.
    2. I have taken soundings from 20 or so firms to get the pricing right.
    3. The FSCS must watch from the sidelines laughing at the ability of IFA firms to attack everything and anything which tries to help them.
    4. Should trade bodies of negotiated harder to stop this before it happened ?
    5. MP’s do not care much about IFA firms. They are bothered about the general voter.
    6. You can only run a legal challenge with lawyers. Not hack IFA’s or “told you so” Compliance Consultants.
    7. Legal advice costs. We are not running a charity. At £200 per firm we are not going to become rich either.

    Let’s see whether those that moan do anything at all. I suspect by the time you have read this you will have formed an answer.

    Gareth Fatchett
    Partner
    Regulatory Legal LLP

  20. In response to Peter Davies

    If only we lived the same world as every other kind of business.

    Fact is we don’t, and nor will we.

    Back to my earlier point, suggest we focus elsewhere, like a battle that is actually win-able (is that a word).

    Richard Smith IFA & Tech Consultant.
    http://www.theinternetconsultancy.com

  21. I don’t understand this. For the past week I’ve been reading posts by IFA’s feeling (rightly) that they are being tucked up by FSCS.

    Here comes someone prepared to take them on for a relatively modest fee and everyone posts ‘they’re in it for the money’. I realise that Mr F. is no charity but I think he at least gives us a fighting chance.

    An action will also demonstrate IFA’s working together and fighting. We have been a pushover for far to long.

  22. I feel I should respond to ‘Nicks’ comments, granted I do not understand all the ins and outs of the IFA world but I have one trump card over you, I have public perception which no matter how hard you try you will never achieve.
    I had a very good friend who was an IFA for 40 or more years until his demise a few years ago, he gave me one invaluable piece of advice “forget what they tell you to your face, just check out what sort of car they’re driving, if it’s something you dream of affording, you’re paying for it”.
    Just remember Nick you never get a second chance to make a first impression, and can I suggest you invest in a spellchecker?

  23. Barry
    We are not cutting off our noses to spite our faces we are fighting for survival.
    What do you do for a living?
    whatever it is I have no doubt that you are NOT liable for other peoples wrongdoing over which you have no control. Nor will you have to pay ever increasing amounts of cash simply to be able to go to work in the morning.Are you regulated by an organisation which knows nothing about what you actually do or the financial problems etc. facing small business.
    If you have been in employment for some time or have run a business will you need to re qualify just to keep on doing the same job you have always done?
    And finally at the end of your working life will you head of into retirement knowing that you will still be liable for every piece of business carried out during your working life. No thought not.
    Until you can answer yes to any or all of the above keep off blogs that do not concern you and which you know nothing about.
    Why not join a like minded group, a consumer panel perhaps?

  24. Evan Owen
    What are you on about?
    Stop giving us cryptic messages and talking in riddles.
    Ever since you got pally with hector over tea at canary palace you have not made any sense.

  25. Who are Mr Smug 1 and 2?. Stand up and be recognised. Why should we pay more money to have our views aired on an agenda that is already wriitten unless possibly they have an axe to grind.

  26. Gareth you need to read FSMA 2000 and tell me where the grounds are to challenge the FSCS?

    If you can read!

  27. Whilst I often agree with Evan Owen, soemtimes you have to be willing to fight a lossing battle. As anyone in the TA in the early 80’s would know, if the Warsaw pact had come rolling over the East German planes, if we were lucky, we’d get killed by a nerve agent or a battlefield Tactical Nuclear weapon in Germany, more likely we’d not even get over the Channel in time to make any difference, but sometimes you’ve got to be willing to risk everything to stop people in their tracks. It’s a bit like a Nucelar deterrent).
    I’m looking at paying Gareth Fatchet (As it appears Steve Farrall is too), without any real concern either way of whethre this is realistic or NOT. I trust Gareth will only proceed if after an initial look he thinks there is any realistic liklehood of getting the F-pack to move on this issue either by legal means or by mediation with our trade bodies such as AIFA, Adviser Alliance or IFADU (none of which are mutual exclusive).

    If Evan can expand his comments a little wider and give me more of a reason why I should not waste my money, I do value his opinion, but it needs to be less cryptic mate…..

  28. Oops, I seem to have struck a nerve with ‘Count me in’!

    I have always tried to get as much info as I can before I make any investment or purchase, and if that means surfing for it that’s what I do. Just because I am not an IFA does your rationale exclude me from reading Money Marketing or other similar sites? My wife doesn’t drive so does that mean she can’t read What Car or have a comment to make?

    What do you do for a living? – I am retired, I was medically discharged after receiving a career ending injury whilst protecting a victim from a not very nice person, 25yrs in the police and it’s bye, bye, thanks very much.
    Gold plated pension I agree, but how many other employees pay 13% or whatever for their working life? Fortunately my dear departed friend had the foresight to introduce me into paying the remaining 2% allowance into an AVC and it is just about to pay out. But I still sought advice from publications before taking the plunge; I suppose you will be aggrieved at that also.

    Whatever it is I have no doubt that you are NOT liable for other peoples wrongdoing over which you have no control – wrong, when a colleague gets dropped in the mire- it might even be in another force 100’s of miles away, everybody pays.

    Are you regulated by an organisation which knows nothing about what you actually do – Yes, it was called the Home Office.

    If you have been in employment for some time or have run a business will you need to re qualify just to keep on doing the same job you have always done? – Yes, so many hoops to jump through a Chinese circus tumbler would get dizzy and out of breath.

    And finally at the end of your working life will you head of into retirement knowing that you will still be liable for every piece of business carried out during your working life. – Yes, I was interviewed recently for an incident 22yrs ago, fortunately I was some 15 miles away, and misconduct in public office has no statute of limitation and carries life imprisonment, which I suggest is a slightly more interesting consideration than paying a few hundred if not a few thousand quid out.

    Will that do you? 5 out of 5 I make it, far better than 0/5, we must be able to agree on something?

    B- Must try harder.

    Barry

  29. If every IFA withheld payment would their tune change?

  30. Nice one Barry! Fair enough answer, hats off to you; and I hope that as youve experienced the sme pain youll back us !!?
    However, I think the key issue is when you decribed having to pay for another colleague, perhaps in another force.
    Two differences: firstly, you were probably never given a PERSONAL bill for someone else’s failings and told you had 30 days to pay it, and secondly imagine if the error you were coughing up for had been made by a solicitor and not a policeman – thats broadly how most of us are viewing this.

  31. If every IFA withheld payment would their tune change?

    That could never happen, to many would pay the FSA would suspend the rest of us.

  32. Good gesture, but no, not another outfit asking for money from IFAs. Where are the bodies we already pay monies to to represent us? AIFA, PFS, CII and the networks, providers and fund managers whom we keep in a good lifestyle.

    Best option, is to contact the local MP, using this link, which makes it so easy. http://www.writetothem.com/

  33. Well if every IFA refused to pay it and withheld the additional monies,would that not show solidarity?.

  34. Equally concerned on what I have been reading, however, correct me here, I thought AIFA are raising these issues with FSA?

  35. The FSCS, FSA and all other regulatory bodies must love reading blogs like this. They know they have won when we can’t even agree on how to defend ourselves from this type of injustice. Win or lose, I believe this to be a very cost effective way of showing the powers that be, that they may have to think a little more carefully the next time they decide to ride roughshod over the IFA community.

  36. Barry, your wife can read what car or comment on a make or model or even rubbish/admire another persons driving.
    Unfortunately this will not make her a driver, so although she may enjoy being a passenger/back seat driver she will never know the pleasures/pains of driving. To be born in a garage does not entitle you to call yourself a car.

  37. Seeing as the FSA issued an incorrect authorisation to Keydata (intermediary my @rse), the claim could be against the FSA for negligence and they should pay up. Sadly, they’ll just get the soap and towel out as usual.

    Additionally, maybe we as IFAs need to issue a one off invoice to each of our clients reflecting this unjust levy, thereby passing the cost on to the consumer – it wouldn’t be much per client would it?

  38. Dear Gareth,

    Ignore the negative comments you’ve received.

    I’ve worked in financial services since 1972, first as a company man, then as a departmental manager for a firm of Lloyd’s brokers and for 31 years as a principal. In that time I’ve been amazed at the p**s poor attitude of many (and on occasions most) IFAs.

    They will go to insurance company meetings, eat and drink their fill and then bitch about what is wrong with that company’s new idea. They’ll go to meetings and agree to support or boycott something. Then they’ll go away and tell an insurer competitor, “Why don’t you have x?” and give the idea away, or they’ll work out how to steal a march on their competitors, knowing that the others will support what has been agreed. Within a few weeks the whole market will be ignoring what was discussed and agreed.

    I’ve no problem with you making a reasonable profit out of this. No sensible business person will disagree with me on this. I expect to make money out of what business you and others give me and I want you to make money too out of the business I give you, so you are there the next time I need you. I suspect that the negative remarks you’ve received are from less than successful people.

    The truth is that historically IFAs and Insurance Brokers have generally failed to agree to support each other and often deserve what has been foist upon our industry:

    big insurers going direct – brokers had the lion’s share of the market; had they stuck together and boycotted any insurer going direct, then they could have stopped it.
    FSA – had we got together sooner and Judicially reviewed some of their practices, they would have been a lot more careful with us.
    I could go on if time permitted.

    The truth is that we’ve NEVER acted together in a concerted effective way. To that extent we deserve the mess that we are now in. Having said that, if we don’t act now, there may not be a tomorrow for us!

    At this point, may I remind you of Winston Churchill’s words: there is some dispute as to accuracy, but the gist is that he said, “Never, ever, ever, ever, ever, ever, ever, give in. Never give in. Never give in. Never give in.” Then he sat down.

    So ignore the negative stuff you’re receiving, unless it’s constructive, and press on.

  39. Well, I’m going to quit the industry and you lot can pay my fee.

    My clients can pretty easily get credit cards to pay for their retirements. Seems to be the UK’s culture at all levels.

    This country is stuffed.

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