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Will ABI sway regulator on levy decision?

Fears are growing that fierce lobbying by the Association of British Insurers will persuade the FSA to change its position on the Financial Services Compensation Scheme funding review and leave advisers facing increased levies.

Since publishing its discussion paper in March, the FSA has favoured option B – supported by Aifa and the FSCS – which would effectively see providers cross-subsidising advisers according to product class.

Now industry sources say the FSA is willing to back a combination of options B and D, which separates providers and advisers into sub-classes within product classes up to a certain threshold, with an additional general pool for emergencies.

The discussion paper highlighted the “administrative complexity” of option D. But in a meeting with the ABI last week, the FSA showed sympathy towards this option, say sources.

FSA spokesman Robin Gordon Walker says: “Our initial views in the discussion paper were not binding. There has been a record number of responses to the consultation.”

The FSCS is still backing option B, describing it as “the fairest and most resilient system for the longer term”.

The ABI has supported option C, similar to option D but without the general pool, but would support option D over the threat of option B. The Investment Management Association is lobbying for option D.

The FSA is due to make its decision in January’s board meeting which will be followed by a consultation paper.

Personal Finance Society public affairs director John Ellis says: “It is crazy that providers are lobbying so hard for something that will do so much damage to their most trustworthy and honourable source of distribution.”


Family fortunes

Increasing pressures on the middle generations to support their children into their 20s while providing for their parents in old age mean we must begin to think in terms of family finance rather than personal finance, says Engage Mutual Assurance chief executive Andrew Haigh

JS&P Towry Law appoints Jones as non-executive chairman

Leading IFA firm JS&P Towry Law has appointed Glyn Jones as non executive chairman of the group.Jones was most recently chief executive of Thames River Capital (2005-6) and prior to that chief executive of Gartmore Investment Management from 2000 to 2004.Before Gartmore, Jones was chief executive of Coutts Group and ran Standard Chartered’s international private […]

‘Axing up-front payment would kill protectionbusiness’

Scrapping up-front commission on insurance products would kill the protection market because consumers will not pay fees for advice, says Lifesearch head of protection strategy Kevin Carr.He warns that removing indemnity commission in the protection market would be counter-productive and lead to consumer detriment because people will be less likely to take advice if they […]

Sheffield Mutual offers income bond

Sheffield Mutual is launching a with-profits income bond alongside its investment bond. Clients will be able to withdraw between 2 and 5 per cent annually. Minimum investment is £10,000 and maximum is £50,000.

Retirement - thumbnail

(Another) downhill stroll — retirement planning

A report published this morning by the CIPD (CIPD Employee Outlook March 2015) provides yet more interesting data to the changing landscape of retirement planning. It should be remembered that we are in a period of genuine flux here given that the default retirement age was scrapped three years ago, and new pension freedoms come online in April. Both of these alterations will have a huge impact on how employees plan for their retirement.


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