I specifically called for this in my last missive. The current model leaves the best firms that avoid the riskiest investments horribly exposed to costs of compensating those that take a more cavalier approach and consistently bring the sector into disrepute.
It’s not worth getting too excited just yet, of course. The last review which concluded in 2013 saw the funding model retained in essence and the maximum amount that could be levied on investment intermediaries actually increased by 50 per cent to £150m.
That it is on the table, though, in a paper which explicitly acknowledged the deleterious consequences of excessive levies, is reason for optimism.
The FCA also noted the hardening of professional indemnity insurance market. Again I should temper this comment by saying it concluded no action could yet be taken, but it has ostensibly heard your complaints and is publicly acknowledging concerns.
Elsewhere it mentioned the long-stop review and re-affirmed its commitment to examining the case for a time-bar on advice claims to Fos, to happen by the end of this year.
All in all, advisers should be pretty happy with this outcome. Not least because it’s the right model for capital adequacy according to early responses we’ve garnered, but because there is hard proof that your cries for clemency are at last being heeded.
Now if the FCA could make some symbolic gesture on its own fees, we’ll really be getting somewhere.