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‘Infuriating’: advisers have their say on the FSCS

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  • 16/08/2012
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‘Infuriating’: advisers have their say on the FSCS
PanaceaIFA’s latest survey on the state of the FSCS comes with almost 100 pages of comments from exasperated advisers. Here are a selection of the best…

How easy has it been/is it to provide FSCS Levy Data i.e. the breakdown of income according to fee block which decides what your fee will be?

“Problems occur when they change the basis on what they are asking us to provide the information and do not give prior warning. As a result we find out when it comes time to make the return. “

“Rising costs, pressure to reduce fees. It seems people in safe civil service jobs are out of touch with the private sector and how tough it is and treat us as a cash cow.”

“The FSA and FSCS always try to standardise things from a perspective of bodies who do not understand the industry. Life is not like that in the IFA world!”

Should any future levy be part of mandatory disclosure to the client so that they can see what the cost of the levy is in actual monetary figures?

“There is too much information already. Clients don’t read it because they can’t see the wood for the trees and life is too short. Less is more with disclosure: an A4 sheet could contain all necessary disclosure information.”

“The client automatically assumes that the FSCS is a government backed bail out scheme and the general media implies this. They need to be clear that they are paying for it!”

“We are obliged to show how much is ‘earned’ on every client specific illustration for every plan and I think it would be both logical and fair if there was a second figure (or percentage) that showed how much money was paid out for FSCS, FSA, FOS, PI, Interim Levy etc. Otherwise, the perception created is that we all make huge sums of money for what sometimes seems like not too much work if a case isn’t overly complex.”

“Levies and fees are now becoming a ridiculous financial burden and the regulators just don’t seem to care a jot. They always start any announcement regarding increases to levies or fees by saying that they realise the financial environment is difficult for all but they just go ahead and do it anyway. It is infuriating and wouldn’t be allowed in any other walk of life.”

How have you apportioned fee income on your returns? i.e. fee paid by a cheque for wide ranging advice in several advice areas e.g. pension, life and investments and unregulated.

“Based on what is required it would have to be apportioned appropriately, though the practicality of doing so would be time consuming with no idea of who benefits from the information being provided to such a detailed level.”

“As far as I am aware, there is no option to put it as general advice, therefore, fees automatically come under an incorrect heading – leading to unfair charges potentially.”

Do you believe that the current system unfairly penalises responsible firms for the malpractice of others?

“The individual should have their own professional indemnity so they carry the liability and not the firm. That way if a firm goes bust and the adviser continues practicing the claim follows him and does not fall on the FSCS. Firms could be responsible for ensuring each individual has PI a bit like having a licence to practice.”

“FSCS funding should first be taken from firms who have done (proven) intentional wrong. Remaining funds should be taken on a risk-based approach focussed on the number of complaints a firm has had upheld.”

“In what other field do the good practices pay for the bad practices? Liken it to the breast implant scandal. Who picked up the tab there? The taxpayer through the NHS, as the guilty parties refused to assist their former patients without them paying another fee to correct damage caused by them.”

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