Where am I? 
Home Better Business Regulation
Categories: Regulation
Topics: Keydata| FSA levy| FSCS
A law firm preparing a legal challenge to an FSCS decision to levy advisers for a number of high-profile investment failures says it needs the backing of 1,000 IFAs to succeed.
Regulatory Legal will press ahead with legal proceedings in its fight to overturn the compensation's scheme's decision to impose a £58m levy on the investment intermediary sub-class, a judgement confirmed by the FSCS this week.
The interim levy relates to the failures last year of Keydata and stockbrokers Pacific Continental Securities and Square Mile Securities. Including £22m worth of structured product-linked failures, the total levy is £80m.
Regulatory Legal partner Gareth Fatchett says the judicial review is now firmly back on the agenda following rumours the FSCS would renege on its original intentions.
But he says the challenge needs the backing of 1,000 businesses to carry any significant weight.
"We need 1,000 IFA firms to do this properly," he says. "We need get 10-15% of the industry to say it is unfair and that way our argument will have some resonance.
"We will proceed with the review - it is a reality - and will go back to the industry again and get more firms to sign up."
Fatchett describes as "no real surprise" FSCS confirmation the £58m interim levy, which has been reduced from £70m, will fall on advisers. But he says this does not excuse the FSCS's original mistake.
"The law is quite clear with regards to Keydata being in the intermediary class and this is the problem," he says.
"But it goes back to the FSA classifying it wrongly - Keydata is a provider and nobody I have spoken to has said differently. The FSCS has not taken into account the material facts."
Although AIFA and the Adviser Alliance have been negotiating with the FSCS on behalf of IFAs, Fatchett says it is now up to advisers to take action.
"If we don't do anything now we never will," he says. "IFAs now have to put up or shut up."
| Share | |
| Comment | Lawyer: We need 1,000 IFAs to challenge £58m Keydata levy |
More regulation news
Email alerts
Recommended reading
Categories
Topics
Comments
The End Is Nigh
So much for the average £440 levy. Two adviser firm here, just received our invoice this morning for a few pints over a £1,000.....with "the 2010/2011 levy to follow" The FSA must be laughing their socks off at all the different 'types' of adviser in-fighting amongst themselves. When only the 'pure' fee-based advisers are left it will be an easy mopping up job for the FSA because you know damn sure the costs of regulation aren't going to fall in the future and there will be so few adviser firms left in existance there will be no way they can share the cost between them - job done!
Posted by: Martin Lewis
Merits Gareth?
If IFAs stump up the hundreds of £thousands you seek and then lose they pay the costs of both sides PLUS the levy amount described by Martin Lewis, you will be happy but will they? I have asked repeatedly for legal opinion which supports such an action, if the merits of success are over 60% I don't have a problem with your challenge but as it is I am refusing to budge, it is not a matter 'fight or flee' as you put it to me. For once it is past experience ruling my passion to put right the many wrongs IFAs face.
Posted by: Evan Owen
We don't need Fatchett
I won't be giving him my money as I don't believe he is capable or the right man and the right way to do it. And even if successful it's only one grievence of many hundered against the F-Pack. There will be more to fight as this will only scratch the surface. The best way to sort this out is ALL IFAS AND FIRMS REFUSE TO PAY ALTOGETHER. That will sort it as the FSA etc will not be able to deal with 5000 closures in one go. Anyone up for this method?
Posted by: Incompetent Regulators Awards Team
Do we need lawyers or a regulator fit for purpose?
If the lawyers are so confident they can win, how much of their own money are they prepared to put up? Depending upon the answer to that will depend upon what action I will take. As always, when there is a dispute between two parties it's usually the lawyers who are the only real winners so caveat emptor! As a two man small firm we received our invoice this week for more than £1,600 which is pretty upsetting considering we have stayed well clear of structured products and all the other nonsense this is intended to fund. And this is in addition to the usual invoice we'll receive from the FSA in a few months time which also includes payment to the FSCS. Furthermore we are expected to keep our costs down and to pass lower costs to clients all to satisfy organisations which don't seem to understand the monumental part they have played in the global collapse. I am so p*ssed off it makes my blood boil. Furthermore if we refuse to pay we'll be on the wrong end of teh regulator and all the problems that brings. This is a Stalinist regime and I honestly wish someone could deal with this shower of parasites at Canary Wharf and the FSCS. I had better go before I put something in print which I might regret later!
Posted by: Anon666
Related articles
Most Read
Audio / Visual
With the industry's biggest fund managers, IFAonline welcomes you to the media centre.
This year we have 14 awards designed to mark out the very best products in a highly competitive and innovative market. This includes three new awards for 2011 to reflect the developments in this rapidly growing market: Best Dual/Multi-Index Product, Best Structured (Oeic) Fund and Best Structured Product Provider.
Events
Poll
|
|
Job search
Ifaonlinejobs will open the right investment career path for you. Search hundreds of vacancies on www.ifaonlinejobs.co.uk now
In Focus
Two months left before the ‘real RDR deadline’ – are you compliant with the required professional...
Viewpoints
2012 marks a watershed for the Life companies, fund managers, banks and advisers who service...
sponsored by
The thin edge of the wedge
As a group we advisers have grumbled about the regulators for somwe years as it has become more and more difficult to make a living. Now it is close to the end for many firms and the banks have almost won and got it their own way. It is time for us all to stand up and be counted, if not for our own individual survival then for us all as 'the public' to have the availablity of independant advisers in the future and not be railroaded by the government in whatever guise they apprear. This is really the thin end of the wedge and now we must stand up for democracy and freedom. Please??
Posted by: Lyn Cooke