FSCS cuts interim adviser levy to £20 million

The Financial Services Compensation Scheme (FSCS) has confirmed a £20 million interim levy for investment intermediaries, down from the previous estimate of £25 million for 2012/13.

The FSCS said that the interim levy would be necessary to pay for claims relating to on-going investment failures such as Pritchard Stockbrokers and Worldspreads for which the costs were not previously levied.

The FSCS originally signalled that a levy would be necessary for 2012/13 in November 2012 and said that it would be likely to hit £25 million in its plan and budget in February.

Advisers are also faced with a £76 million annual levy for 2013/14.

FSCS chief executive Mark Neale said: 'We have kept the potential costs and claims volumes in these two sectors under constant review. Although the scale of the levies has reduced, because of expected claims costs, the potential deficits still mean we need to raise these levies to ensure we meet our obligations to pay compensation to consumers.

'We recognise the impact these costs will have on firms and hope that our earlier warnings will have allowed firms to make some provision for the costs.'

The FSCS said that the Financial Services Authority would start sending out the invoices during the week of 18 March.