In this new video, Informed Choice chartered financial planner Nick Bamford talks about the Financial Services Compensation Scheme (FSCS) and the interim levy to pay for the failure of Keydata Investment Services and others.
Investment advisers and fund managers are having to pay a further £247m towards compensation payments for investors who lost money in schemes from Keydata Investment Services.
Keydata is the biggest collapse ever dealt with by the Financial Services Compensation Scheme (FSCS).
£93m of the total £247m interim levy is being paid by financial advisers, including Informed Choice.
Whilst this is not significantly higher than the interim levy of £80m raised in 2010, our own invoice for the levy has gone up 7.5 times due to changes in the way in which our share of of the interim levy has been calculated.
This interim levy, which comes in addition to the main scheme levy which will become payable in June, represents just over 1% of our business turnover and is a significant regulatory expense.
Whilst we fully support the consumer protection and confidence benefits associated with the Financial Services Compensation Scheme (FSCS), we are incredibly unhappy with the way in which the compensation funding is charged to the sector.
We are also angry with those IFAs who sold the failed Keydata products in the first place and perpetuated the scale of the failure.
