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

Fleet Mortgages joins OPDA to support homebuying data reform

Fleet Mortgages has joined the Open Property Data Association (ODPA) as the buy-to-let lender...

The Mortgage Works adds tracker deals and trims fixed rates

The Mortgage Works is adding new two-year tracker products to its buy-to-let range and...

Mortgage brokers see busiest start to year since stamp duty rush

Mortgage intermediaries recorded their busiest start to a year since the stamp duty rush,...

Rental yields edge up as landlords find firmer footing

Rental yields across the private rented sector stabilised in the first quarter of 2026,...

ModaMortgages adds two-year fixes to buy-to-let range

ModaMortgages has expanded its buy-to-let range with the launch of limited edition two-year fixed-rate...

Latest publication

Other news

Fleet Mortgages joins OPDA to support homebuying data reform

Fleet Mortgages has joined the Open Property Data Association (ODPA) as the buy-to-let lender...

In steadier markets, the adviser experience becomes the differentiator

When markets become more uncertain or transactional activity looks like it is flattening, the...

The Mortgage Works adds tracker deals and trims fixed rates

The Mortgage Works is adding new two-year tracker products to its buy-to-let range and...