PIMFA Calls for review of the FSCS following a further interim levy announcement
28th November 2018
PIMFA, the trade association for investment managers and financial advisers, today (28th November) called for an urgent review of the financial services compensation scheme (FSCS) following yet another announcement of an interim levy that the industry will be expected to pay for.
This levy, for £69m, is partly due to higher than expected pension transfer related claims. This will be in addition to its previous announcement in May 2018 of increased costs of £407 million above its previous forecast of £336 million.
PIMFA are deeply concerned that the reasons for these claims is not being tackled. It is not clear if the FSCS follows through on getting money it pays out back from PI providers, who covered the firms who ceased to trade, which caused claims to end up with the FSCS.
Further it is creating an untenable position for firms, where they are unable to effectively plan and budget for their future.
Liz Field, CEO of PIMFA said:
“Unexpected levy increases of this magnitude cannot be part of a long term sustainable funding option for the FSCS. Member firms need to be able to plan their own finances and be confident that the relevant regulator is taking pro-active steps to address the root causes of increased FSCS claims not just the symptoms. We know the levy is complicated, but the industry needs to work with FSCS on a model that works for firms.
Our Member firms fund the FSCS through their levy and should reasonably have confidence that the burden of costs from claims settled by the FSCS, whether they relate to defaulting firms or unsuitable advice, are recouped from the PI with the funds recouped used to reduce the financial burden increasing FSCS levies place on member firms. We need this situation clarified.”
Notes for Editors
About PIMFA – the Personal Investment Management & Financial Advice Association
- PIMFA is the leading trade association for firms that provide investment management and financial advice to everyone from individuals and families to charities, pension funds, trusts and companies.
- PIMFA represents both full and associate member firms. Full members provide a range of financial solutions including financial advice, portfolio management, as well as investment and execution services. They assist everyone from individuals and families, to charities and pension funds, all the way to trusts and companies. Associate members provide professional services to the PIMFA community.
- PIMFAleads the debate on policy and regulatory recommendations to ensure that the UK remains a global centre of excellence in the wealth management, investment advice and financial planning arena. Our mission is to create an optimal operating environment so that its member firms can focus on delivering the best service to clients, providing responsible stewardship for their long-term savings and investments.
- PIMFA was created in 2017 as the outcome of a merger between the Association of Professional Financial Advisers (APFA) and the Wealth Management Association (WMA) with a history as a trade association going back for 27 years – read more.
For further information on this release or other press matters please contact:
- Sheena Gillett – PIMFA Head of PR & Communications, firstname.lastname@example.org
+44 (0)20 7011 9869
- Nigel Ross-Scott – PIMFA Content Manager, email@example.com
+44 (0)20 7382 0371