Aifa to fight £50m increase to FSCS claims limit
Aifa plans to lobby against the proposed increase in the annual limit on Financial Services Compensation Scheme claims paid by investment intermediaries from £100m to £150m.
The regulator published its consultation paper reviewing how the FSCS is funded today.
The FSA has dismissed calls for a product levy to be introduced and for changes to the different firms that make up FSCS classes.
It is proposing a £50m increase in the annual claims limit paid by investment advisers. Life and pensions advisers will continue to meet claims up to a £100m threshold, while fund managers will see their claims threshold reduce from £270m to £200m.
The regulator has also suggested the creation of a retail pool for firms under the Financial Conduct Authority which will have to meet claims where one class breaches its annual limit.
Aifa policy director Chris Hannant says the funding review was supposed to address the “onerous burden” FSCS levies have become for advisers and ensure the FSCS funding model is fair and more predictable.
He says: “It is unclear how these limited reforms will correct these issues and we are disappointed the FSA has not gone further in its review of the funding arrangements. Options such as pre-funding have seemingly been rejected without being subject to public consultation.
“We will be seeking to reverse the proposed increase in the threshold for the investment intermediation class which will be a further blow for advisers who are struggling under the cost of regulation.”
Hannant says it is clear over recent years some firms have been placed in an inappropriate class.
He adds: “This review does not seem to address this fundamental issue.”
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