Financial Services Compensation Scheme  

Advisers disappointed at new FSCS levy

The operation of the retail pool has also been amended so when the threshold is reached by any single class, all other classes will contribute to the costs.

FSCS compensation limits for investments, home finance intermediation and debt management claims meanwhile are to be increased from £50,000 to £85,000, bringing the limit in line with the current PRA FSCS limit for deposits.

Moving forward, Mr Gallacher said he would like to see the introduction of a product-based levy, which would see clients and other consumers contributing to the FSCS rather than advisers, so that the cost of higher risk products is more closely linked to the risks of them resulting in a future FSCS claim. 

Advisers have previously called for this type of levy but the Financial Conduct Authority ruled it out because it would need legislation to be passed by Parliament.

Robert Reid, managing director at Syndaxi Chartered Financial Planners, agreed. He said: "The FSCS is taking the money off the wrong people. We are subsidising a bunch of failures."

Venilia Batista Amorim is a freelance writer for FTAdviser