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Pension advisers’ FSCS levy hits £90m following Sipp claims

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Life and pensions advisers are to pay a levy £10m higher than forecast as a result of rising claims against Sipp advice.

Pension advisers will pay £90m in FSCS levies in 2016/17, up from a forecast of £80m published in January. This compares to a levy of £100m paid in 2015/16.

All other advice sectors will pay a lower levy than was predicted, including investment advisers who will pay £94m, down from £108m.

The levy totals £337m, down from the £363m forecast in January but up 2015/16 where it was £319m.

FSCS managing expenses are budgeted for £67.4m in 2016/17 and the scheme will recover £337m of interest costs relating to Treasury loans to Bradford and Bingley and Kaupthing Singer & Friedlander made during the banking crisis in 2008.

FSCS chief executive Mark Neale says: “The annual levy allows us to compensate customers. That generates consumer confidence and trust in the industry.

 “We look forward to the forthcoming review by the Financial Conduct Authority into how FSCS is funded, and will play our part in discussions. I encourage the industry to play a full role in the debate.”

FSCS 2016/17

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Not to worry. All of the clients who invested in “boring” pension plans wont mind baling out those investing in high risk SIPPs using UCIS etc. Their “trust in the industry” can only be enhanced.

  2. Pension advisers’ FSCS levy hits £90m , no!, it’s also Protection advisers picking up this unfair invoice, Our Company have never sold a SIPP, but are being made to pick up the costs, grouping Protection & Pension advisers together is a scandal, this has to be wrong, so wrong, but obviously we have a governing body who don’t know the difference between adviser types, or are happy for this legalized theft to carry on!

  3. It’s time this was stopped. When it started we were asked for a few hundred pounds a year and that was annoying. Now FSCS plus FCA and all the other leaches basically account for one months turnover. It is criminal that the good pay for the bad and that the FCA fiddle around with suitability reviews for regulated advisers whilst the unregulated sell crap that we end up paying for.

    If the regulators actually regulated the bad rather than picking on the good for not being perfect then it would be easier to stomach as there would potentially be an end in sight.

  4. The problem isn’t SIPPs per se, it’s investments made via them which have failed, for which the intermediaries who recommended them probably didn’t have in place appropriate PII cover (hence they’ve swiftly been forced into default once the claims started to roll in) and which the FSA failed to monitor so as to prevent the present situation arising. So really, the reason for this huge levy is a failure of regulatory supervision.

  5. Couldn’t agree more Julian, but the investments are fca regulated. I was approached by one such firm and asked to ‘promote’ their product. We did our due diligence, spoke to our PI guys and didn’t proceed with the product. I subsequently hear that one if a that was involved has had the permissions restricted. The provider is still peddling the investment, what is the regulator doing about it. I would suggest nothing. I am aware of another investment which has failed and was on the fca radar in 2012′ yet the investment was still being sold in 2014. The regulator washes their hands and blames everyone else. They are a joke and untouchable.

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