OpinionJun 19 2013

Restricted should be levy exempt

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This includes restricting myself to only deposit-based structured products. The only exception I make is using business property relief-related products for later life inheritance tax planning, which is disclosed in my terms of business.

I have not lost any clients; indeed they look relieved when I explain I will not be considering recommending higher-risk products that have no FSCS protection.

So my point is this. If I choose to work under this restriction (which I would highly recommend) why should my firm have to contribute to FSCS levy claims based on products that are not regulated products covered by the scheme? Taking it a step further, why should any levy payers contribute to claims where unregulated products have been bought through regulated financial advisers? It is immoral that those IFAs who offer these unregulated products to their clients can do so in the knowledge that if it all goes wrong the client is still covered because it was bought through a regulated financial adviser.

Regulated firms should only be able to sell regulated products. If a firm chooses to sell an unregulated product, that is fine but it should be made quite clear to their client that there is no recourse to the compensation scheme whether they bought it through a financial adviser or not.

In short it is a loophole that needs to be closed otherwise IFAs who work on the ‘fringes’ will continue to sell these dodgy products with impunity, knowing that my firm and others like mine will pick up their tab when they disappear into the sunset.

Dominic Browning

Principal

Browning Financial Planning

Morar

Torquay