SimplyBiz: Providers should fund Financial Services Compensation Scheme
Providers, not advisers, should primarily fund the Financial Services Compensation Scheme, SimplyBiz Group has told the Financial Conduct Authority.
The group, which includes the mortgage club SimplyBiz Mortgages, was responding to the FCA’s Financial Advice Market Review which will assess whether to reform the regulation of financial advice to boost access.
SimplyBiz called for the FCA to simplify regulation, for consumers to take greater responsibility for actions and for consumers to have choice over payment method.
The group wrote: “The current [FSCS] funding model, with the adviser bearing the costs for this compensation fund, is grossly unfair and unsustainable.
“SimplyBiz Group proposes that product providers should become the primary source of funding of the FSCS.
“Providers have significantly greater market intelligence than anyone other than the regulator and so should be well able to identify ‘problem firms’ at an early stage.
“Either providers could bear the full costs, or, advice firms could make a token contribution – with advisers paying 20% of the cost of the FSCS and providers contributing the balance.”
The Council of Mortgage Lenders called for stability rather than more regulation today – and it was a similar story with SimplyBiz which suggested “the FCA focuses on dramatically reducing and simplifying the regulation it produces”.