I write to you as those ultimately responsible for the financial regulatory structure of the FSA and the FSCS. I write particularly with regard to the news that we as advisers are about to be hit with a £70m levy from the FSCS at an average of £10,800 per firm.
Until recently, my business was only me but as I move slightly in the direction of retirement, I have a colleague who is also an adviser.
Whether it will ever be possible to retire is a very thorny question due to the determination of the FSA/FOS to make us responsible for advice given beyond the statutory time bar period of 15 years.
It is reckoned that this levy will push more firms out of business, so then the number of firms left to pay into the bottomless pit gets smaller and we face ever growing and hugely disproportionate bills.
There are major expectations that the numbers of IFAs will shrink massively after implementation of the RDR at the end of 2012. We worry as to how many firms might be tempted to “sell” overzealously before commission is banned, proposing to then shut their Ltd Cos at the end of 2012 and “dump” their liabilities on the FSCS, adding further to the huge burden on those left.
We worry that the FSA stands idly by and will maybe do a “retrospective” review of such practices – doing their usual of regulating with the “tail of the dog” rather than the head – and in so doing leaving us to pick up the financial tab, for their lack of up-front regulation.
This brings me to why we are being hit with this massive bill. We are told that some £43m of the £70m is due to the failings of Keydata and £27m in respect of stockbrokers Pacific Continental and Square Mile.
Why are we, small investment firms, picked out to fund all of this? Keydata was a “product provider” heavily into the structured product market, which I am pleased to say we have never exposed our clients to. How diligent was the FSA in seeing a problem coming? With regard to the
stockbrokers, how can the FSA stand by and allow firms of this magnitude to get into such a mess?
AGB Financial Services,