FSCS levy set to rise for pension advisers

In addition to the increase in the number of claims, there has been an increase in the uphold rate and the average amount of compensation paid per claim. 

In particular, there has been an increase in claims relating to advice to borrow to invest in non-standard assets, including overseas property.

Darren Cooke, adviser at Derbyshire-based Red Circle Financial Planning, said the Fscs' outlook and higher levy for some advisers raised two issues; why the claims arise in the first place, and who is left footing the bill.

"[It points to] the continued failure of the regulator to do exactly what they are supposed to do. Although these claims will relate to historic cases I do not think the FCA has improved and the same practices continue today which we will all pay for tomorrow.

"Secondly we cannot continue a system where the good guys pay for the bad guys. There has to be a better system to provide for clients who have to resort to the FSCS and the sooner the FAMR review reports on this and a new system is implemented the better.

"Finally the FCA need to investigate the individuals from any firm that has received a large number of complaints and ensure they have not been able to phoenix into a new business. If that is the case their permissions and authorities should be revoked. Any adviser stacking up complaints in this way should not be allowed near the public again."