FSCS

Rural communities risk being cut off from financial advice as their IFAs exit the industry under the weight of the RDR and levy hikes, MPs were told today.

The FOS must make a final decision on the level of its reserves this month, as firms' continued refusal to pay fees linked to payment protection insurance (PPI) cases look set to exhaust funds and force levies to rise by as much as 25%.

AIFA is calling on the FSCS to consult with the industry on exactly how it will rebate levypayers with money repaid to it by Norwich & Peterborough (N&P).

The FSCS has pledged to use the money it receives from the £57m Keydata compensation deal it struck with N&P to partly refund advisers' levies.

Norwich & Peterborough (N&P) has agreed to pay compensation directly to all customers it sold Keydata products totalling £57m, exceeding the building society's previous outside estimates for the bill.

The IMA has distanced itself from earlier proposals to launch a judicial review into the funding of the FSCS, as it looks at "other options" to tackle the levy on behalf of its members.

Wealth manager Brooks Macdonald took a £545,000 hit from the FSCS levy last year but profits before tax for the six months to 31 December 2010 still rose 24% to £3.06m.

Keydata victims awaiting compensation have become the latest targets of bogus callers who claim to be from the FSCS.

AIFA will propose a split in the FSCS sub-class for investment intermediaries, in a bid to separate out firms where intermediation is only a "secondary activity" and not their main business.

SIPP provider James Hay has entered into a war of words with Rowanmoor over the FSCS levy and whether it should be passed to clients.