You are here: Home - News -

Mortgage advisers’ FSCS fees revealed

  • 12/04/2017
  • 0
Mortgage advisers’ FSCS fees revealed
Mortgage brokers will pay £14m in levy to the Financial Services Compensation Scheme (FSCS) for 2017-18.

However, those who sell protection products such as life insurance face paying their share of the £147m bill for advisers in the life and pensions class.

FSCS chief executive Mark Neale warned that the regulator would initially raise a levy of £100m in this sector but could then raise a supplementary levy depending on claims throughout the year.

TMA Mortgage Club has been campaigning for the FSCS to change how mortgage brokers are treated under the levy – arguing the current system is unfair.

Under the current system, advisers are billed for the estimated amount of compensation required for a class of products which they are responsible for giving advice for.

However, life insurance has been placed in the same class as pensions, which means that when bad pension advice is given mortgage brokers who sell life cover have to pay up.

An FSCS consultation on restructuring the levy closed on 31 March.


Unchanged levy

Brokers in the Home Finance Intermediation class will see their contribution unchanged.

“Although we had levied in January for an unexpected spike in claims on this class, these were attributable to one particular failure and do not appear to represent a trend,” the FSCS said.

The Life and Pension Intermediation levy has decreased by £24m from the indicative forecast published in January.

The FSCS said this was largely because of a lower average compensation cost for Self-Invested Personal Pension (SIPP)-related claims.

“Approximately 93% of the costs in this class are for SIPP-related claims and the forecast average claim value has reduced from £36,000 to £32,000,” it said.

“The forecast costs for the sector in 2017/18 are now expected to be £146m, which is £17m below the indicative figure of £163m. The costs for 2016/17 have decreased by £9m since the supplementary levy was calculated for the same reason,” it added.

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.


Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.


Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.


Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.

Read previous post:
A man hands over some keys
Northern Powerhouse best for property investment: Kuflink

The new Buy-to-Let Index from peer-to-peer property lender Kuflink has suggested that the Northern Powerhouse offers the best returns for...