IFAs lobby for a fairer compensation scheme
IFAs have claimed they are being held to ransom when it comes to paying the Financial Services Compensation Scheme levy.
Derek Bradley, chief executive for PanaceaIFA.com, said intermediaries were being forced to contribute to the levy or risk putting their livelihoods at stake.
He said: “This is another levy upon a decreasing number who have no choice but to pay or have permissions withdrawn. This is simply unfair and often impossible to budget for.
“The FSCS is needed but a new and fairer funding method is required and soon.”
This comes as the FSCS announced that the advisory bill would form part of a £221m levy for the financial services industry as a whole.
Keith Richards, distribution and development director for Tenet, said although the levy has dropped by £1m, from £34m to £33m, for IFAs, it is still a major burden for the community.
He said: “The marginal reduction for investment intermediaries compared with the overall increase for the industry is a clear reflection of the quality and professionalism of the sector. However, the financial burden this places on advisers is unwelcome and the further risk of interim levies experienced last year is impossible to mitigate against.”
Mark Ireland, an adviser for London-based Barton Financial Planning, said: “Clearly the levy will have an impact on the finances of the IFA sector and smaller firms are likely to be hit hardest by the costs of implementing the retail distribution review.”
