SimplyBiz chair Ken Davy has upped his criticism of Financial Services Compensation Scheme funding after the lifeboat fund announced another additional fee call.
Yesterday, the FSCS said it needed to raise another £24m from advisers through an interim levy due to an increase in Sipp claims, often related to the misselling of high-risk products.
The lifeboat fund had already reached its maximum standard levy contribution from life and pension advisers.
In a statement this morning, Davy says: “This additional levy highlights once again the disgraceful injustice of the current funding method of the FSCS. Thousands of firms who have never been involved in this type of business or had any way of being aware of, or stopping, the firms that have caused the losses are faced with picking up the bill!
“This totally arbitrary and ridiculous system which virtually everyone recognises is a broken model must be radically changed by the FCA without any further delay.”
In a recent review of FSCS funding, the FCA introduced new regulatory reporting requirements for higher-risk products to see if the data could be used to risk-rate the amount firms pay towards the FSCS compensation pot.