Financial Services Compensation Scheme  

Nicky Morgan to join FSCS board

Nicky Morgan to join FSCS board

Baroness Nicky Morgan is among the three latest appointments to the board of the Financial Services Compensation Scheme. 

It comes as the scheme's chairman warned its rising levy reflected "too many bad outcomes" from unsuitable products and advice.

Baroness Morgan, former chairwoman of the Treasury select committee, has previously warned the only way to reduce the every-growing levy was to prevent the spread of investment scams and unauthorised firms in the market. 

The rising levy has recently featured heavily in headlines as the driving force behind exponential increases in the regulatory bills received by advisers last week. 

Advisers and industry stakeholders have frequently raised concerns the current levy set-up means the "polluter" often fails to pay for consumer compensation, with firms remaining in the industry left to pick up the bill. 

Baroness Morgan joins the FSCS as a non-executive director alongside Aviva's former chief operating officer Cathryn Riley and inspector of constabulary Wendy Williams.

Marshall Bailey, chairman of the FSCS, said the scheme was facing challenges "new to us all".

Mr Bailey added: "Our rising levy reflects too many bad outcomes from unsuitable products and advice, and we must work to prevent this.

"In order to tackle and overcome these issues, and continue to drive our organisation forward, we need to ensure we maintain diversity of thought on our board, because from resistance and challenge comes clarity and strength."

Last week advisers told FTAdviser the increased regulatory bills - which in some cases jumped by as much as 85 per cent - would force them to hike their hourly rate in a bid to balance the books. 

The FSCS levy to be shouldered by advisers in the coming year has increased by £16m to £229m.

Last month the chairman of the City watchdog, Charles Randell, warned the already "unacceptable" levy was likely to increase as a result of the coronavirus crisis. 

Caroline Rainbird, chief executive of the FSCS, said: "The work we do at FSCS is extremely important, not only to people who hold their money with regulated financial services providers but also in contributing to the financial stability of the UK.

"Each of these three new impressive individuals expressed a distinct understanding and appreciation for what we’re trying to achieve."

rachel.mortimer@ft.com 

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