Another year, another potentially crippling bill from the Financial Services Compensation Scheme (FSCS) for advisers. It has become such a regular occurrence that it almost does not pass as news, although its damaging effect is not diminished.
The FSCS last month announced a £76 million levy on advisers for 2013/14, on top of a £25 million interim levy for 2012/13. Again, the culprits behind that big bill were far from what would normally be considered as advisers: spread-betting group Worldspreads and Pritchard Stockbrokers.
It comes after four successive years of a total adviser FSCS bill topping £90 million and, with any interim levy for 2013/14 yet to be announced, it seems likely to become five in a row.
It’s staggering to see the impact Keydata and other investment failures have had on levies since 2009/10. The year before that, advisers paid just £45 million, while in 2007/08 and 2006/07, when sub-classes operated differently and so a direct comparison is difficult, the annual levies for the whole of financial services were just £94.5 million and £75 million respectively.
Adviser trade bodies have made admirable efforts to protest against the unfairness of the scheme, but to little effect, with plans for a higher threshold for adviser payments set to worsen the problem.
Protests falling on deaf ears is nothing new, but that does not diminish the unfairness of the FSCS.