Take the FSCS, for example. In April this year it announced its levy for 2015/2016 – a staggering £319m compared with £276m in the previous year. Of this, a whopping £100m applies to life and pension advisers.
At the time, the boss of Hargreaves Lansdown described the levy as “crazy” and “an unfair burden on reputable and blameless firms”. Spot on.
Some now believe that these spiralling costs are in danger of killing independent financial advice. Or more likely, of driving the industry ever upmarket in search for clients, so disenfranchising thousands along the way – the Angelas of this world.
Take Neil’s Blackdown Financial as an example; a business that goes about its work in both a thoroughly professional and gently provincial way, never taking big risks or courting controversy. It does not deal in unauthorised collective investment schemes or toxic investments.
Despite this conservatism it has just had to hand over a cheque for £10,418 to the FSCS. Last year, the bill was £5,279. FSCS costs alone now consume 5 per cent of Blackdown Financial’s turnover.
Add in professional indemnity premiums and FCA bills, and it is no wonder that Blackdown’s managing director Lee Tomkins says the firm is constantly running just to stand still.
Like many in his profession, he now believes the FSCS funding model is unsustainable as fewer advisers remain in financial services to pick up its bills. It needs an overhaul.
Hertfordshire-based Richmond House Group agrees. It feels so aggrieved about these crippling costs that it is now urging the FCA to conduct an independent review of the regulation of financial adviser firms and the FSCS.
It has launched a petition on the matter which can be signed at www.goo.gl/chDA8d. All advisers of sound mind should support it – I certainly have.
So far, a little over 700 have done so – a pitifully small number, really, which I put down more to poor publicity than a lack of support among the adviser fraternity.
Most of the comments on the petition refer to punishing increases in FSCS bills. “Unfair”, “not sustainable”, “flawed” and “a broken model” are all words or phrases used by supporters of the petition.
Richmond managing director Paul Beasley does not mince his words either. He says the levy is “fundamentally flawed and inherently unfair” – and “does nothing to increase consumer confidence”. He implores the financial adviser sector to voice its concerns “before it is too late”.
His company’s petition may go the way of most petitions – absolutely nowhere. But that is not to undermine its importance in raising a key issue.