Citywire printed articles sponsored by:
View the article online at http://citywire.co.uk/new-model-adviser/article/a658379
No end to staggering FSCS bills
by Daniel Grote on Feb 12, 2013 at 13:54
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.
Blogs sponsored by:
Sponsored Video: Philip Saunders – The new Investec Diversified Growth Fund – Seeking an antidote to inflation
Portfolio Manager Philip Saunders introduces Investec's new managed solution which aims to provide investors with attractive real returns over the long–term.