TSC member: Govt could use bank fines to cut FSCS levy


The influential Treasury select committee is preparing to turn its guns on the Financial Services Compensation Scheme levy amid concerns about rising advice costs.

TSC member and Conservative MP Mark Garnier has called for a debate on how bank fines are distributed, suggesting they could be used to cut the FSCS levy.

Speaking at the Conservative party conference in Manchester today, Garnier said: “There is a feeding frenzy on the financial services area which means we have got to a stage where there is no sense of ‘caveat emptor’ on the part of the consumer.

“It’s always someone else’s fault and that’s a great problem, which manifests quite worryingly in the huge amount IFAs are having to pay to the FSCS.

“One of the things we need to have a very sensible conversation about is where some of those bank fines are going.

“Should we be diverting some of that money into a fund that will balance the FSCS levy out?”

The Wyre Forest MP also said he wants the TSC to launch an investigation into the advice gap, and emphasised the need for consumers to be able to access advisers as well as “robo-advice” services.

He said: “Can a robot deliver better advice than a person? The answer depends on what the consumer wants.

“I have no doubt that in 20 years’ time we will have consumers who have a perfect understanding, but right now there is a risk of people being left behind.

“There are people out there who will never understand a website.

“At some point everybody will feel completely comfortable using robo-advice, but I don’t think we’re there yet.”