Today, the FSCS announced it had revised down the levy for this year to £833m, with mortgage brokers having to contribute £12m instead of the originally stated £22m.
Robert Sinclair (pictured), chief executive of Association of Mortgage Intermediaries (AMI), said: “The FCA and firms can take no comfort in this reduction. The amount of compensation for the failure of the FCA to adequately control markets is still eye-watering.
“The amount mortgage and protection advice firms have to pay will now be only slightly higher than last year, but the guillotine remains over their necks for a further levy later in the year.”
He put this down to mishandlings in the investments and pensions sector, which, he said, was not the responsibility of advisers in the mortgage and protection sector.
Sinclair added: “AMI remains of the view that the funding of the compensation scheme still needs the development of a new approach. As a minimum Treasury must allow FCA to retain financial penalties to reduce the amount good firms are being asked to pay.
“A new product levy that all consumers pay would be the simplest solution to ensuring a more durable funding mechanism to compensate consumers, whilst avoiding the jeopardy firms face each year as the scheme has to hand round the begging bowl.”