Financial Services Compensation Scheme  

FSCS chief warns levy review would not get to 'heart of problem'

Earlier today (October 19) the Personal Investment Management & Financial Advice association warned of an “existential threat” to the advice industry due to “enormous” increases in their PI premiums.

FTAdviser recently spoke with advice firms which had witnessed jumps of up to 160 per cent in their regulatory bills over the past two years.

Ms Rainbird said there “is not one simple, or even complex, answer” that will make this issue disappear.

She said: “The simple fact of the matter is too many consumers are having bad outcomes and that’s not good. 

“Those bad outcomes lead to more compensation being paid which means that ultimately the levy payer is paying more.”

She said the FSCS wanted to be involved in the levy discussion and the call for input, and because the lifeboat scheme is unable to change its own rules, it is in “a good position” to lead the way.

Ms Rainbird added: “We are in a good place to work and lead the discussion that needs to be had with industry, with the regulators and with consumer groups to look at how we can collectively be affirmatively disruptive.” 

amy.austin@ft.com

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