Advisers to be levied £240m again as FSCS announces £1bn overall levy

'Cannot normalise this level of loss'

Sophie King
clock • 2 min read

Financial advisers can expect a significant regulatory levy bill once again for the next financial year as the Financial Services Compensation Scheme (FSCS) has predicted an overall levy forecast of £1bn for the first time.

In its budget for 2021/22, the FSCS has predicted a bill of £361m for financial advisers' funding class - also known as the life distribution and investment intermediation class (LDII) - to pay for the compensation scheme. However, funding classes are capped at £240m, so the excess beyond that figure will be applied to other types of firms.  The FSCS said an ongoing rise in complex pension advice claims was the main cause: it said almost three-quarters (71%) of those costs were estimated to be in respect of advice claims, where the FSCS expects the recent trend of processing more complex...

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