Regulation  

FCA and TSC tell broker he must continue to pay pensions levy

FCA and TSC tell broker he must continue to pay pensions levy

A mortgage adviser has been told he will have to continue paying a pensions levy despite his life and protection insurance business only accounting for 12 per cent of his revenue.

The Financial Conduct Authority (FCA) and the Treasury Select Committee have responded in detail to sustained lobbying by Ben Wall, mortgage broker at Wall 2 Wall Finance in Bristol.

Mr Wall was told he would have to continue to pay the Financial Services Compensation Scheme (FSCS) pensions mis-selling levy, despite having no permission for pensions.

Article continues after advert

The FCA online return form forces him to enter his minimal insurance income into the FSCS fee box under life and pensions.

Mr Wall said: “We have to pay a levy for pensions. That is the scandal. It is extortion.”

Mr Wall complained to his Jacob Rees-Mogg, MP for north-east Somerset, about the issue. His MP then wrote to the FCA and to Harriett Baldwin, economic secretary to the Treasury, to demand an explanation for why Mr Wall was having to pay for the mistakes of pensions advisers.

Tracey McDermott, acting chief executive of the FCA, sent two letters to Mr Rees-Mogg. In the first letter, dated 24 September 2015, Ms McDermot stated: “Mr Wall’s firm is selling a form of life insurance, and this activity is included in the life and pensions intermediation class.

“Arguably, it could instead be included in the general insurance intermediation class, but I would note that if this were the case, Mr Wall would pay levies to fund compensation for the customers of failed general insurance brokers.”

Ms McDermott wrote again to Mr Rees-Mogg in November 2015 after the MP sent her a letter stating the fees impacted small firms disproportionately.

She pointed out that 37 per cent of regulated firms paid the minimum FCA fees, which increased from £1,000 in 2015 to £1,084 in 2016.

A spokeswoman for the FCA said it “fully” consults on FSCS funding rules and advisers are operating in an industry where the levy applied, adding that it appreciated the adviser’s concerns.

The FSCS levy structure is also to be reconsidered as part of the Financial Advice Market Review.