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

Skipton to cut residential rates and revive three-year fixes

Skipton Building Society is cutting rates across parts of its residential mortgage range from...

The Leek lowers mortgage rates across residential and specialist products

Leek Building Society is cutting mortgage rates across parts of its residential, shared ownership,...

Fleet Mortgages adds two-year tracker products to buy-to-let range

Fleet Mortgages has launched three new two-year tracker mortgages at 75% loan-to-value across its...

Norton Home Loans provides remortgage on PRC home in Southampton

Norton Home Loans has completed a £218,000 remortgage for joint applicants in Southampton, allowing...

Scotland attracts rising interest from GCC property buyers

Scotland is becoming an increasingly popular destination for Gulf buyers looking at UK property,...

Latest publication

Other news

Skipton to cut residential rates and revive three-year fixes

Skipton Building Society is cutting rates across parts of its residential mortgage range from...

The Leek lowers mortgage rates across residential and specialist products

Leek Building Society is cutting mortgage rates across parts of its residential, shared ownership,...

Fleet Mortgages adds two-year tracker products to buy-to-let range

Fleet Mortgages has launched three new two-year tracker mortgages at 75% loan-to-value across its...