Product providers will have to contribute more to the Financial Services Compensation Scheme under new proposals outlined by the FCA today.
After an industry consultation, the regulator is proposing that product providers will have to contribute around 25 per cent of the compensation costs which fall to the adviser funding classes.
Fund Strategy sister title Money Marketing understands the proposal has been vigorously contested by provider groups including the Association of British Insurers in meetings with the FCA.
The regulator is also planning to merge the life and pensions and intermediation funding classes, meaning advisers will no longer pay levies based on how much pensions business they write compared with investments, but be charge on overall volume instead.
Threesixty managing director Russell Facer says that he hopes the FCA continue to focus on “supervisory activities to reduce down the number of claims on the FSCS rather than just focus on splitting the compensation pot.”
Last week, Money Marketing revealed that the FCA had decided to pave the way for a risk-based levy by introducing a new section on firms’ Gabriel returns where they will have to disclose non-mainstream pooled investment sales from April next year.
NMPIs rely on “unusual, speculative or complex assets” and include the likes of unregulated collective investment schemes and traded life policy investments.
This has been confirmed today, as have measures to introduce debt management firms to FSCS coverage and extending FSCS protection to structured product intermediation.