“Therefore they should pick up the lion’s share of the FSCS cost. I would not mind if the IFA sector maybe paid 10 per cent of 15 per cent of the overall cost towards maintaining a compensation scheme, but the overwhelming majority of the expense should be on providers.”
When asked whether providers would support such a move, Mr Davy said: “If the advice sector is as important to them as they claim, and to many providers, it is, then they may take a reasonable view.
“A few years ago a significant number of them did indeed voluntarily contribute to subsidise the cost of the FSCS levy on advisers. And many providers are heavily dependent on the advice sector.
“If the FSCS levy were to be removed from the shoulders of IFAs, it would remove a significant barrier to more advisers joining the industry and remove an inhibitor to business growth.”
This point was one of several made by SimplyBiz’s FAMR response; it also called for a more flexible remuneration scheme, such as introducing remuneration over the life of a product; the introduction of a 15-year long stop, creating simpler ways of expressing costs to consumers; using technology more widely and wisely to improve guidance for consumers; and to lighten the regulatory burden on the advice industry.