"Singing loudly over FSCS funding consultation" "Singing loudly over FSCS funding consultation"

10 Mar 2017 Ken Davy

Everyone in the industry knows the way the FSCS is currently funded is a disgrace. It is wrong in principle and practice that you should be billed for the actions of the careless, reckless, or downright criminal firms of which you cannot possibly have any knowledge or control. Invoices from the FSCS have been dropping on you without warning, sometimes demanding payment of thousands of pounds within 30 days, for liabilities, again, totally outside your knowledge or control. We have waited years for this review and this may be our last chance to try to get this grotesque system changed.

Do you want to be faced with paying these ridiculous amounts year after year, never knowing when the next interim levy is going to hit you? If the answer is no, you must act now. The FCA’s consultation ends on 31 March, so you must submit your views or response before then at: www.fca.org.uk/cp16-42-response-form. The full consultation paper is available at: www.fca.org.uk/publication/consultation/cp16-42.pdf.

The good news is that the consultation paper makes clear that the FCA recognises the current system is unfair to intermediaries. It is equally clear that it believes product providers should contribute directly towards the liabilities of the FSCS.

However, there is still insufficient recognition of the direct affinity between investment houses and insurers and the intermediary sector; virtually every claim on the FSCS relates directly to a financial product. Equally, it is the product providers who have the market intelligence to spot advisers who are careless, reckless, or just plain crooked. If providers contribute most of the FSCS funding, it will ensure they use their market knowledge to stop problem firms creating liabilities much earlier than at present.  

There are 31 questions posed in the consultation paper. However, questions three and 18 are absolutely key, please have a look at them and make your voice heard. I urge you to act as it really is a case of now or never. If you ignore this last opportunity you could end up in Heartbreak Hotel.

Ken Davy is chairman of SimplyBiz Group


Testimonials

“A great service all round”

Harry Moore
Harry Moore IFA

Read More

Latest News

Matt Timmins: New guidance body has no right to word 'advice'

October 20, 2017

Much more needs to be done to help educate consumers on the vital difference between receiving guidance or advice

Read more >

Government must help meet the needs of the elderly

October 11, 2017

Being able to congratulate the FCA, while not by any means a first, is not something I am able to do regularly.

Read more >

"A princely way of looking at succession issues"

October 04, 2017

Seeing all the stories about Prince George starting school set me thinking about longevity and business succession issues for financial advisers.

Read more >

"Providers must allow tax deductible advice"

September 28, 2017

Knock, knock. Are you there? More importantly, are you listening?
I ask this question because of the enormous opportunities the current market is presenting for each and every adviser, whether working within a large firm or a one-person practice, as an independent adviser or restricted.

Read more >