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Updated: FSCS hits investment advisers with £33m levy
The Financial Services Compensation Scheme (FSCS) is to hand out annual levy bills amounting to £33m for investment advisers.
The levy is being raised to cover the cost of compensating investors in products such as the failed Keydata Lifemark funds, as well as UK clients of stockbroker Wills & Co.
The £33m investment adviser bill will form part of a £221m levy for the financial services industry as a whole. This compares with a £34m levy for the investment intermediary sector last year, and a total levy of £217m.
In December the FSCS warned an additional interim levy of as much as £40m could charged to investment intermediaries because of the deficit in the subsector, which came as compensation claims were higher than expected. The scheme today confirmed that this was still the case, with the interim cost fuelled chiefly by payouts for MF Global investors.
FSCS chief executive Mark Neale said he expected the scheme to incur “substantial continuing legal costs” from its pursuit of advisers who sold Keydata products.
However, the levy is lower than the £100m investment adviser levy that was handed out in January 2011, when advisers and fund managers paid out a total of £326m to compensate primarily Keydata investors.
