MPs have called on the FCA and the Government to reconsider a product levy as part of the upcoming review of the Financial Services Compensation Scheme’s funding model.
A product levy was previously deemed out of scope of the review because it would require a change in legislation.
However, in an early day motion tabled on 25 May, Labour MP Alan Meale asked the regulator and Government to ensure the FSCS funding review will look at all possible solutions.
The motion says: “[This house] calls on the Government and the FCA, in the wake of the Financial Advice Market Review, to ensure the forthcoming FSCS levy approach examines all possible solutions, including a product-based levy and a whitelist of products, to support the creation of a more sustainable advice sector that is well placed to innovate and offer affordable advice to a broader range of consumers.”
The motion is supported by five MPs: Mark Durkan, Margaret Ritchie, Jim Shannon, Gavin Robinson and Gordon Marsden and was tabled by Meale following lobbying by Tenet and Apfa.
Tenet argues says by ruling out the product levy idea the FCA has “deliberately evaded the issue”.
Chief executive Martin Greenwood says: “Similar schemes work perfectly well in other sectors, such as the Motor Insurers’ Bureau and the Pension Protection Fund. Adopting one in financial services would fund the compensation scheme and support education initiatives aimed directly at the consumer.”