PIMFA, the trade association for the wealth management and financial advice industry, welcomes the comments from the UK Financial Conduct Authority's (FCA) Chairman, Charles Randell's (pictured) regarding the Financial Services Compensation Scheme (FSCS) Levy and other matters concerning our industry.
PIMFA has long been in dialogue with both the FCA and FSCS on the matter of the levy and has already made further representations to the regulator since the onset of the covid-19 pandemic. Following this dialogue the FCA sent the recent "Dear CEO" letter to firms outlining its expectations during the pandemic, while also providing the regulatory forbearance PIMFA called for.
It is also encouraging to see the chairman of the FCA acknowledge the FSCS levy is already at an unacceptable level placing an unfair financial burden on firms that serve their customers well and give good advice. PIMFA has for some time asked serious questions about the sustainability of the FSCS Levy, while also calling for reform of regulation and supervision.
The implicit warning that the levy is likely to increase as a result of the current covid-19 pandemic will however be a source of anxiety for many firms."
PIMFA has also been working with the FCA to help consumers protect themselves from scams through its Scam Safe campaign and will be working with other partners to increase this work over the coming months.
Liz Field, chief executive of PIMFA, commented: "That the FCA chairman has acknowledged the need to redesign the current system so that it better protects ordinary retail investors from investments which are unsuitable for them, and ensures that firms which market unsuitable investments don't pass the bill for their misconduct on to well-run firms is very welcome news."
"All well-run firms want to protect consumers from poor advice or outright scams and the FSCS levy has been a source of understandable resentment for those firms for a significant period of time. The implicit warning that the levy is likely to increase as a result of the current covid-19 pandemic will however be a source of anxiety for many firms."
"PIMFA has already called for more engagement with the regulator and for better supervision for firms that need help and I would ask the FCA continues to work so a system that protects consumers but doesn't punish well-run firms for the misconduct of others can be created."