FSCS cuts levies but wealth managers facing higher bill

By John Kenchington

Added 12th April 2017

The Financial Services Compensation Scheme (FSCS) is raising its investment intermediary levy for the 2017/18 year by £4m in spite of an overall budget cut.

FSCS cuts levies but wealth managers facing higher bill
The scheme has announced a final levy for this year of £88m for the investment intermediation class (SD02), £4m higher than the £84m indicative figure published in January.
 
The overall FSCS levy budget has been cut by £15m to £363m, thanks largely to a bumper £24m cut for the life & pensions intermediation class.
 
The scheme collects money from the industry to cover investors' losses if products collapse, but some advisers feel product providers should shoulder a greater share of the levy burden.
 
Today's fee hike for advisers is also likely to fuel anger that the scheme unfairly charges the whole industry for the actions of a few reckless product providers.
 
An ongoing consultation into the FSCS's levy model is investigating whether firms should be levied based on the riskiness of the products they promote.
 
FSCS chief executive Mark Neale said: “Although the indicative forecasts we published in January and our final levy numbers this year are broadly similar, firms know that our levies can be unpredictable owing to the nature of some failures and the claims they generate.
 
"We welcome the continued support of levypayers at this time."
 

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