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FSCS scraps £30m interim levy for investment advisers

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FSCS scraps £30m interim levy for investment advisers

The Financial Services Compensation Scheme (FSCS) has announced it will not impose a planned £30 million interim levy on investment intermediaries for 2013/14.

Last November, the FSCS said it expected to raise an interim levy on investment intermediaries of £30 million. It said this was due to an expected increase in compensation costs resulting from claims against Catalyst Investment Group.

Advisers had £78 million levied on them for the 2013/14 financial period. If the FSCS had gone forward with the interim levy, advisers would have paid £108 for 2013/14.

The move to scrap the levy follows a review of the number of claims coming in and the timing of compensation payments, the scheme said.

In its plan and budget, published in January, the FSCS again said it expected advisers to pay up £30 million but since then it has updated its assumptions about which claims it will process in this financial year.

The FSCS said it expects to start processing claims against Catalyst Investment slightly later and these costs will most likely be pushed into 2014/15.

Mark Neale (pictured), FSCS chief executive, said: ‘New information on the volume and timing of claims suggests we do not need to levy the industry for more money during 2013/14. That is good news for firms. We still expect claims relating to Catalyst Investment Group during next year. So, we will update the industry when we have more information on what this change means for 2014/15 when we announce the levy in April.’

The 2014/15 levy for investment intermediaries has been set at £105 million. It was the first levy to be calculated under the new 36 month funding approach. The new approach is meant to reduce the volatility of annual levies and the likelihood of interim levies in the future.

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