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

Accounts manager jailed after £767k theft from Newcastle panel management firm

A senior employee at Newcastle-based Pure Panel Management has been jailed after embezzling more...

Cambridge BS opens new funding round for local housing and homelessness projects

The Cambridge Building Society has opened applications for its Community Fund, continuing its commitment...

Assetz Capital expands development finance offering

Assetz Capital has updated its development finance proposition to allow planning gain and residual...

MIMHC offers free mental health first aid training

The mortgage and property finance sector is rolling out a series of free mental...

Clydesdale Bank raises selected residential mortgage rates

Clydesdale Bank is increasing a number of residential fixed mortgage rates across its core,...

Latest publication

Other news

Accounts manager jailed after £767k theft from Newcastle panel management firm

A senior employee at Newcastle-based Pure Panel Management has been jailed after embezzling more...

The mortgage protection gap advisers can’t ignore

The Financial Conduct Authority’s (FCA) consumer research findings published late last year, offered an...

Cambridge BS opens new funding round for local housing and homelessness projects

The Cambridge Building Society has opened applications for its Community Fund, continuing its commitment...