Advisers have been hit with their highest fees so far following increases in the Financial Services Compensation Scheme levy.
This week, advisers Nick Bamford and Alan Steel were among those who received letters citing high increases in their levy payments.
Mr Bamford, executive director for Surrey-based Informed Choice, said he had seen a 14 per cent uplift this year, and that IFAs were being “burdened by the levies without seeing the benefit of their investment”.
He said: “We cannot control what is happening to other firms so the cost of FSCS continues to rise. We also cannot control the make-up of the sub-classes of the scheme.
“We cannot use the cash to improve our business propositions and services. We have, alongside FSCS fees, to make sure that we have sufficient capital adequacy and PII, so gold-plating of the system.
“It grows and continues to mushroom at great expense and still the problems continue. And it isn’t about advice - it is about misleading, risk-based investment products that are not being properly regulated or even unregulated products being sold to the wrong clients.”
Mr Alan Steel, chairman for West Lothian-based Alan Steel Asset Management, said IFAs were being punished for incidents such as the Keydata and Arch Cru scandals.
He said: “The model is entirely wrong. We create an organisation that cannot run itself within a budget and it is not responsible for its mistakes. There is no pressure on that organisation to meet its costs. Why should we pay for it? We did not get involved with Keydata and we did not get involved in Arch Cru.”
This came after chancellor George Osborne confirmed that pensions guidance would be provided by bodies including the Money Advisory Service, meaning a rise in the Mas levy for some advisers.
At the moment, according to Mr Bamford, only 0.7 per cent of Informed Choice’s annual regulatory invoice is diverted to Mas, but the latest proposals would “increase it significantly”.
Right to reply
When asked about the latest increases, a spokesman for the FSCS declined to comment but referred to the levy outlines published with its Outlook newsletter in April this year.
In it, the FSCS announced an annual levy of £276m for 2014/2015, noting that its outlines had been changing because of “the intrinsic unpredictability of the demand on FSCS”.
