Compensation Levies May Increase Advice Fees

Compensation Levies May Increase Advice Fees.

The Financial Services Compensation Scheme (FSCS) has today published its final levy for 2017/18 at £363m.

What many people do not know, it is not the Government the foots compensation bills for failed banks, pensions, investment or insurance firms, it is regulated financial firms themselves that pay levies.

£363 million.  There are not 1 million financial services companies in the UK, if there were then the levy would just be £363 per firm on average.  There are a few thousand firms, meaning that levies on each firm are potentially in the £000s each year.

• The final FSCS levy on Life & Pension Intermediaries (Brokers/Financial Advisers) is £147m
• The final FSCS levy on Investment Intermediaries (Brokers/ Financial Advisers) is £88m (£4m higher than budgeted for)
• The final FSCS levy on Home Finance Intermediaries (Brokers/ Financial Advisers) is £14m
• The final FSCS levy on General Insurance Intermediaries (Brokers) is £18m
• The final FSCS levy on Deposits (Banking) is just £9m.

The balance of the FSCS levy mainly for base costs and other smaller sectors.

So guess who is picking up the majority of the ‘tab’, yet receives the least amount of complaints?  Yes, your friendly financial adviser and broker.

Financial Adviser Fees: What to expect?

It is difficult for financial advisers to control costs.  Some financial advisers will increase their fees.  As you may know, we have not increased our fees in over 5 years and only increased them three times in 17 years.  We are doing our best this year to keep fees down, to make our systems even more comprehensive and efficient to shield you from these increased costs that protect you.