The Association of Mortgage Intermediaries has called on the Financial Conduct Authority to conduct a formal review of Financial Services Compensation Scheme Funding now.
The Association of Mortgage Intermediaries has called on the Financial Conduct Authority to conduct a formal review of Financial Services Compensation Scheme Funding now.
Robert Sinclair, chief executive of AMI, said it was high time the regulators stopped visiting massive fees on mortgage brokers for ills committed by intermediaries advising on pensions and investments.
He said: “Our investment brothers continue to delay proper resolution of this issue by demanding a long-stop that runs counter to a fair consumer outcome.
“We need the FCA to speed a proper review of FSCS funding to negate their failure to properly police the fringes of pensions advice.”
Sinclair’s call comes a day after the FSCS published its budget for 2016/17 which revealed plans to double the levy charged to brokers arranging home finance from £5m in 2015/16 to £10m in 2016/17.
Even more drastic is the rise in charges levied against brokers arranging general insurance – last year the charge was zero but as a result of the FSCS assumptions for the next year the levy has risen to a whopping £19m.
Sinclair added: “A small increase in a mortgage levy and GI is immaterial against the share of the huge life and pensions pot that should never be visited on mortgage brokers. “
Patrick Bunton, director of London & Country, agreed with Sinclair and said the FSCS levy is in “urgent need of an overhaul”.
He said: “The silos need to be aligned with permissions held and the principle of the good paying for the misdemeanours of the bad is patently unfair, especially when some of those who dump liabilities on FSCS rise like a Phoenix from the ashes to go back into competition against those who paid their bill.
“For mortgage and GI firms to be carrying liability for investments and pensions firms is like making car manufacturers pick up the liabilities for house builders - it's patently unfair.”
The FSCS will review its claims and levy assumptions and announce the actual 2016/17 levy in April. The plan and budget is for consultation which will close on 22 February 2016.
