Personal Touch Financial Services is absorbing the cost of the Financial Services Compensation Scheme interim levy on behalf of its members.
In January, Money Marketing revealed the FSCS is charging a £93m interim levy on advisers. The levy includes FSCS compensation costs of £86m, mainly to compensate Lifemark investors, and management expenses of £7m.
Investment advisers have also seen their annual levy double to £40m in 2011/12.
PTFS IFA managing director John Ruddick says: “These costs have come as a shock to every organisation in our marketplace but given the economic conditions our advisers are working under, we felt it was not right to pass them on to members. It is a tough market at the moment and we need to make every effort to support our advisers to grow their businesses.”
Evolve Financial Planning director Jason Witcombe says: “If a network decides to absorb the costs as a one-off it may be that the money comes from that company’s profits.
“But if higher FSCS levies become a trend then I suspect over time that will be reflected in a lower income share or higher network fees.”