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 expands broker mortgage range with higher-LTV deals

Newcastle for Intermediaries has expanded its mortgage range with the return of higher loan-to-value...

Mortgage arrears and possessions fall in second quarter

The number of UK mortgages in arrears declined in the second quarter of 2026,...

Paragon restores Track to Fix option on buy-to-let tracker mortgages

Paragon Bank has reintroduced a feature allowing existing buy-to-let customers to move from a...

Pepper Money plans Scottish first charge mortgage launch

Pepper Money plans to launch its first charge mortgage range in Scotland in September,...

Molo cuts buy-to-let mortgage rates by 12 basis points

Molo has reduced rates across its standard and specialist buy-to-let mortgage ranges for UK...

Latest publication

Other news

Newcastle expands broker mortgage range with higher-LTV deals

Newcastle for Intermediaries has expanded its mortgage range with the return of higher loan-to-value...

Mortgage arrears and possessions fall in second quarter

The number of UK mortgages in arrears declined in the second quarter of 2026,...

Paragon restores Track to Fix option on buy-to-let tracker mortgages

Paragon Bank has reintroduced a feature allowing existing buy-to-let customers to move from a...