Tenet disappointed in FSA funding model proposals
The adviser support group said the FSA’s decision to retain its proposal to increase the investment and intermediation sub-class threshold from £100m to £150m is inappropriate within the economic and regulatory environment and raises fresh concerns regarding the burden of increased compensation levels on intermediary firms.
Tenet had responded to the FSA’s previous consultation paper on the FSCS by offering the solution of a regulatory and compensation scheme levy.
The solution was discounted despite the FSA acknowledging that valid ways to overcome some of the obstacles they had raised to operating a levy system had been identified.
Keith Richards, group distribution and development director at Tenet, said: “It is potentially reckless to continue with a model so clearly flawed and ignoring many of the concerns and alternative solutions offered when there is a chance to remedy the problem.
“Tenet has asserted for some time that the entire regulatory and compensation funding programme is at risk of destabilising its own foundations and that the unfair burden continues to be placed on the intermediary sector.
“Whilst the FSA has proposed to shift some of the burden to product manufacturers in its latest consultation paper we are equally not convinced that this is the right solution for the long term.
“The intermediary market has to be clear and transparent regarding costs and it goes against the FSA’s own principles to bundle the ever increasing cost of regulation and compensation in to the industry’s pricing models.”