Where am I? 
Home Better Business Regulation
The FSCS has admitted flaws in its funding model in the wake of industry outrage over the interim levy.
FSCS chief executive Mark Neale conceded there are problems with the current Scheme, in a letter to over two thousand industry practitioners who signed a petition calling for a review of its funding.
Neale says he wants advisers to play a part in the FSA's ongoing review of the funding structure of the FSCS.
But in the Scheme's defence, its chief executive says even a revised funding method will not be "perfect", and he highlighted potential problems with a pre-funded alternative.
He says: "No funding model will ever be perfect. However, we and the authorities share the industry's view the FSCS plays an important role in providing consumer confidence.
"So, it is important to consider the funding issues in the round, including the potential benefits and problems of pre-funding."
He adds the ongoing review will have to take into account impending EU legislation on the protection of deposits and investments.
He concludes: "Our shared objective is to establish a funding model that enables FSCS to continue providing a vital service to consumers while pooling the costs of that service across the industry in a fair, transparent and sustainable way."
The investment intermediation sub-class, which includes advisers, was hit by a £93m interim levy earlier this year to cover the costs of claims against Keydata Investment Services, Wills & Co and other investment intermediary firms.
The Investment Management Association is considering bringing a judicial review of the FSCS interim levy on behalf of its members after fund managers were hit with a £233m levy.
| Share | |
| Comment | FSCS: No funding model will ever be perfect |
More regulation news
Email alerts
Recommended reading
Categories
Topics
Comments
But we can do better than this!
"Our shared objective is to establish a funding model that enables FSCS to continue providing a vital service to consumers while pooling the costs of that service across the industry in a fair, transparent and sustainable way." Wrong! IFAs do not share that objective, which in any event is contradictory. How can you pool the costs in a fair, transparent and sustainable way? IFAs want a protection system that is self funding, predictable, and comprehensive. The EU want a combination of pre-funding and occasional levies. These levies should not exceed 3% of the amount of funds covered. They have no requirements for compensation for pure advice. Me thinks the FSA/FSCS are making up their own 'gold plated arrangement- as usual.
Posted by: Green Eyed Monster
FSCS
This is not rocket science, you have a problem, you admit you recognise problem andthat some people and comopanies are being affected by said problem so you address the problem asap NOT 2 years down the line! Such a stance is nothing short of amateur, unprofessional and downright incompetent.
Posted by: Robert Marshall
Creative license
Interesting article. More hysteria results. The letter does not admit anything. He merely makes the same point again. Accuracy and online news don't mix I guess.
Posted by: Ch Hancock
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
Flawed system
It's the people that work at the FSCS which is the biggest problem. If they had brains and new their business we wouldn't have half the problems. Mix in the FSA's low calibre staff as well and he presto, a mix of total rubbish and bad decision making!
Posted by: Incompetent Regulators Awards Team