AIFA calls for changes to FSCS proposals

Published on

Association of Independent Financial Advisers

The Association of Independent Financial Advisers (AIFA) has responded to the FSA’s consultation on the Financial Services Consultation Scheme (FSCS) Funding Model Review.

Chris Hannant, policy director at AIFA, said it was essential that the funding for the FSCS is affordable and sustainable.

He added: “These proposals ignore the current economic climate, decreasing numbers of firms in the sector and the negative impact the RDR will have on advisers’ revenues. As things stand, they risk undermining the long term future of the adviser sector.

“We are calling on the FSA not to increase the threshold for investment intermediaries, not to remove cross subsidy from PRA regulated product providers to intermediaries, and to look again at a product levy and pre-funding.”

On the issue of cross subsidy from PRA regulated product providers to intermediaries, AIFA argues that the FSA’s analysis behind their proposal is flawed, and urges them to reconsider.

Hannant said: “Cross subsidy provides stability and valuable additional capacity in the funding model. The distinction between firms regulated by the PRA or the FCA is an artificial one and not a sound basis for determining FSCS funding issues.

“It is imperative that product providers should retain some responsibility toward their products and that they should be called upon to contribute, alongside the other classes, as there is a close affinity between the manufacture and distribution of products.”

COMMENT ON MORTGAGE SOUP

We want to hear from you!
Leave a comment and get the conversation started.
You need to register to post, so please login or sign up below.

Latest articles

Newcastle cuts two-year residential rates amid demand for shorter fixes

Newcastle for Intermediaries has cut rates across its two-year residential range for both purchases...

Virgin Money cuts fixed rates and withdraws Retrofit Boost and Own New deals

Virgin Money is reducing selected fixed rates across purchase, remortgage and product transfer ranges...

LendInvest reports stronger profitability in H1

LendInvest has reported a rise in profitability and lending activity in its half-year results...

Geoff Worrall to drive new lending push at Time Finance

Time Finance has strengthened its asset finance leadership team with the appointment of Geoff...

MIMHC launches programme to train over 100 Mental Health First Aiders

The Mortgage Industry Mental Health Charter (MIMHC) Foundation has announced its most ambitious programme...

Latest publication

Other news

Newcastle cuts two-year residential rates amid demand for shorter fixes

Newcastle for Intermediaries has cut rates across its two-year residential range for both purchases...

Virgin Money cuts fixed rates and withdraws Retrofit Boost and Own New deals

Virgin Money is reducing selected fixed rates across purchase, remortgage and product transfer ranges...

LendInvest reports stronger profitability in H1

LendInvest has reported a rise in profitability and lending activity in its half-year results...