Many advisers were left disappointed last month when the idea of
a product levy was deemed outside the scope of the current review
into FSCS funding.
As I've highlighted in this blog several times before, Treasury
and the FCA are serious about reforming the current funding system,
as evidenced by the fact that FSCS reform is the first consultation
to be launched as part of the Financial Advice Market Review.
The rising cost of delivering regulated activities however,
remains a concern, as well as the growing pool of legacy risk which
has accumulated within the FSCS over two decades of industry
The burden of this expanding pool of risk continues to fall on a
shrinking number of contributors, with further consolidation likely
in the future if action is not taken.
The decision to exclude a product/investment levy from the FSCS
review has restricted its scope to deliver a fairer and more
sustainable solution to these ongoing issues, even if ultimately an
investment levy is discounted after careful consideration.
Yesterday therefore, I wrote to the Chancellor, George Osborne
seeking government consideration to broaden the consultation to
include alternative funding options, including a product levy.
This is not to say that a product levy should be regarded as the
favoured outcome of the review, but rather that in order to deliver
the fairest and most effective sustainable solution, it is
important that all possible alternatives are considered, compared
and debated. The proposal of an investment/product levy would not
mean that the sector would be excluded from making a contribution
but this should be at an appropriate level.
Regulation is of course a key component in providing consumer
protection and influencing good outcomes for the general public,
but it is becoming increasingly unreasonable to continue with an
outdated funding system that levies unfairly against a smaller
number of contributors in a totally different post-RDR
Increasingly unfair cost pressures on good firms and their
clients are compounded by the fact that regulatory fines were
originally intended to influence behaviours and help fund
regulation, thereby providing a dividend for the most compliant.
Instead, all fines now go to HM Treasury and the increased cost
burden is being shared by a reducing pool of individuals and
As always, I welcome your views and ideas on FSCS reform -
please direct any constructive feedback to: firstname.lastname@example.org
As many of you would be aware, the Personal Finance Society is
gearing up for its annual awards programme in November, with a
revamped list of award categories.
For the first time, we will be formally recognising the
importance and influence of personal finance journalism.
Recently, I met with other members of the media awards judging
panel, where we shortlisted three finalists in each of this year's
three national media awards.
Next month, Personal Finance Society members will have the
opportunity to vote for two trade press awards. The trade press
plays a significant role in stimulating debate in our sector and
raising public awareness of the issues that we are all invested in
and passionate about, and so I encourage you all to place your
votes when voting begins next month.
This week, I was also privileged to chair the Schroders UK
Platform of the Year awards judging panel, tasked with awarding
excellence and achievement in platform technology.
Annual awards offer an opportunity for participants to display
their commitment to their clients and the profession alike. I urge
you to consider applying for a Personal Finance Society Award by
visiting our website and
submitting your application by 12th August.
About the Blog
In this blog Personal Finance Society CEO Keith Richards will be
keeping you up-to-date with all the Personal Finance Society news,
projects and initiatives that we have in the works.
Read past editions of the blog »