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FSCS hikes adviser levy to £112m for 2014/15

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FSCS hikes adviser levy to £112m for 2014/15

The Financial Services Compensation Scheme (FSCS) has hiked its levy on advisers for 2014/15 to £112 million.

The FSCS will levy investment intermediaries £112 million for 2014/15, a £7 million increase on its earlier figure of £105 million for the same period which it announced in January.

Despite this rise for advisers, the FSCS’s total 2014/15 levy is down by £37 million from its initial projections to £276 million, from the £313 million first mentioned in its plan and budget for the year.

The FSCS said the changes follow a review of the latest claims data and trends by the compensation scheme.

Only two sectors- investment intermediaries and home finance intermediation have had their final levies for the year increased.

The FSCS said the increase of the investment intermediaries’ levy includes the cost of Catalyst claims after it deferred a potential interim levy of £30 million in 2013/14.

It added that fund managers will receive a rebate from the FSCS as a result of successful recoveries by the Scheme relating to Keydata. The FSCS is understood to have made out of court settlements with five advice firms it tried to take to court to recoup the compensation it paid out in relation to failed investment Keydata.

Mark Neale (pictured), FSCS chief executive said: ‘There is good news today for many firms. Our overall levy for the coming year is down from earlier indications. That partly reflects an expectation of lower claims volumes.

‘But fund managers and investment intermediaries are also benefiting from our success in making recoveries. We have secured many millions of pounds for them and will continue to pursue recoveries wherever it is cost-effective to do so.’

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