Financial Services Compensation Scheme  

FSCS funding 'biggest win' for advisers in 2018

FSCS funding 'biggest win' for advisers in 2018

Forcing product providers to contribute towards the Financial Services Compensation Scheme levy was the "biggest win" for the advice sector in 2018, the chairman of the SimplyBiz Group has claimed.

Ken Davy, chairman of SimplyBiz, said this development was the biggest win for both himself and the advice industry as a whole this year.

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He said: "I have argued strongly for many years, often as a lone voice, that the funding model for the FSCS was grossly unfair and fundamentally flawed.  

"The FSCS dumped 100 per cent of the costs on to advisers who clearly had no possible way to spot or influence the reckless and criminal firms and advisers who created most of the liabilities."

He added: "Make no mistake, the FSCS bills will still hurt when they arrive, but at least every adviser will know that without this contribution from product providers, their invoice would have been about one third higher."

Providers have previously criticised the funding proposals, claiming those responsible for failures should be the ones to pay and the proposals "defied logic". 

Moving into 2019 Mr Davy said there had "never been a better time" to be a directly regulated financial adviser, with an increasing number of younger people attracted into the profession and improving margins and profitability.

This has been driven by the increasing recognition by consumers, the media and the regulators of the importance and value of good quality financial planning advice, Mr Davy said.

Spurred by the Government’s apprenticeship scheme, Mr Davy said the number of financial services apprenticeships have increased in 2018 with SimplyBiz’s own New Model Business Academy gaining more than 60 individuals training to become financial advisers.

Mr Davy said: "Over the years, financial advisers have faced and overcome enormous challenges, mostly not of their own making.

"However, I believe we are now on the cusp of an exciting and successful era -it seems to me that the demand for the care, expertise and strong client relationships we provide can only increase."

Mr Davy added that 2018 had been a "momentous" year for SimplyBiz, citing its listing on the London Stock Exchange in April, and he said the company now worked with some 3,000 directly regulated financial advisers.

rachel.addison@ft.com