Twitter icon Email alerts icon Latest News RSS icon Magazine icon Stay connected:

View the article online at http://citywire.co.uk/wealth-manager/article/a638966

FSCS to pay back £71m but additional levy for 2010/11 expected

by Annabelle Williams on Nov 30, 2012 at 14:52

FSCS to pay back £71m but additional levy for 2010/11 expected

The Financial Services Compensation Scheme (FSCS) is to pay back £71 million to fund management and investment intermediary firms which have resubmitted tariff data for 2010/11 – the year of the massive £336 million interim levy.

However, the returning of cash to the industry now means a shortfall in funding for compensation claims in 2010/11, and firms face an additional £36 million redistribution levy to cover the gap.

This historic shortfall is likely to see a £33 million levy weighed on investment fund managers, and £3 million on investment intermediaries - who today learned of an additional £25 million shortfall in FSCS funding for 2012/13 thanks to the failure of Pritchard Stockbroker and spreadbetting firm Worldspreads.

The news follows the FSCS' decision in August that income derived from funds would be exempt from firm’s tariff data, and more than 400 firms chose to resubmit their data in the hope of clawing cash back.

Claims from firms with in-house funds totalled over £89 million, and while the FSCS said it had accepted £71 million worth of claims, it rejected £26 million in claims.

The bulk of the money is being returned to fund management groups, who will receive £68 million back, while firms classed as investment intermediaries will see £3 million returned.

Cash is still being returned to groups, in the form of credit notes from the Financial Services Authority (FSA), but firms will have to wait until early 2013 to hear of the final sums expected for both FSCS levies - 2010/11 and 2012/13.

1 comment so far. Why not have your say?

PCIAM

Nov 30, 2012 at 15:23

My 'IFA Preservation Tax' bill has just gone up. It was 20% of my 2010/11 profits. Thanks, Rathbones.

My 'Regional Broker Tax' bill for 2012/13 is now due. I'm not sure who I should thank for that, but someone seems to have been asleep on the job. Perhaps we could split the bill with the buyers of the Pritchard client base, who got a humdinger of a deal from the FSA.

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Sponsored Video: Bringing it all back home


As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

Investing for income in a changing environment


With talk on interest rates on the horizon, our latest roundtable debate covers income investing against a changing backdrop

On the road

Click here to find out more from the Audience Development team.

Sorry, this link is not
quite ready yet