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

AI doesn’t remove bias. It gives us the chance to manage it

One of the great promises of artificial intelligence has always been objectivity. Machines, unlike...

No mandate for automatic cohabitation rights, Deech warns

Proposals giving cohabiting couples automatic rights over homes, pensions and other assets lack clear...

Bristol tops 2026 Japanese knotweed hotspots

Bristol has retained its position as England’s Japanese knotweed capital, recording more than twice...

Marsden passes £100m Guernsey lending milestone

Marsden Building Society has surpassed £100m in mortgage completions in Guernsey through its partnership...

Mortgage pressures weigh on health as households lack financial safety net

Two in five UK adults say their finances have harmed their mental health over...

Latest publication

Other news

AI doesn’t remove bias. It gives us the chance to manage it

One of the great promises of artificial intelligence has always been objectivity. Machines, unlike...

No mandate for automatic cohabitation rights, Deech warns

Proposals giving cohabiting couples automatic rights over homes, pensions and other assets lack clear...

Bristol tops 2026 Japanese knotweed hotspots

Bristol has retained its position as England’s Japanese knotweed capital, recording more than twice...