Following the FSA's facilitation of detailed negotiations between the Small Business Practitioner Panel (SBPP), Financial Services Compensation Scheme (FSCS), Trade Associations and credit providers, a successful outcome has been reached in which one of the providers - Premium Credit Limited - will be able to provide a suitable instalment plan for firms who wish to use such a facility by which to pay their fees and levies.
Graeme Ashley-Fenn , Director of Contact, Revenue and Information Management, Financial Services Authority comments: "I am delighted that the FSA, through working closely with the industry, has been able to help facilitate this positive market solution. We understand
how important it is for firms to be able to manage their cash flows and to have the option to fund such payments by instalments. Equally this solution enables the FSA to continue to receive payment of the single (FSA / FSCS / FOS) invoice and to contain our overall administration costs".
The FSA made a public commitment in its Business Plan to improve its business capability and effectiveness and in particular to make it easier for small firms to do business with the FSA. As part of this commitment, the FSA consulted the industry in January 2005 to gauge the level of interest for payment of fees and levies by instalments, and whether any credit provider would be interested in operating such a credit scheme.
As a result, the FSA established a working group to liaise with the industry, which was made up of representatives from the FSA, SBPP and FSCS. A number of providers contacted the FSA to discuss the possibility of providing a market solution. Potential solutions were then discussed at a meeting arranged between Trade Association representatives and credit providers on 28 April 2005. Subsequently the working group was expanded to include AIFA, AMI, BIBA, ICAEW and IIB, with a unanimous agreement that a pan-industry solution should be found that would allow the FSA to receive a single payment, but offer a facility for firms to spread this cost using payment by instalment.
David Severn, Director General, Association of Independent Financial Advisers comments: "On behalf of the Association of Independent Financial Advisers (AIFA) and the Association of Mortgage Intermediaries (AMI) I am glad that we have been able to secure for our members such a good package with Premium Credit. The instalment plan to be offered by Premium Credit offers guaranteed acceptance and our members will get an interest rate which is both competitive and preferential. We will work closely with Premium Credit to make sure the process of applying for the instalment plan is hassle free for our members. I would like to record our thanks to the FSA and the Small Business Practitioners Panel for their help in facilitating the deal with Premium Credit."
Premium Credit Limited have guaranteed "auto-acceptance" to all FSA authorised firms, and a competitive package for a payment period of ten months, (although repayment periods can be flexible if required). The Trade Associations within the industry working party have negotiated a more favourable rate for trade association member firms. The FSA and Premium
Credit Limited are confident that this facility will be in place for firms to utilise for payment of invoices issued from June onwards.
Simon Moran, Chief Marketing Officer, Premium Credit Limited comments: "Working in harmony with the Trade Associations within the Working Party, we have identified the bespoke requirements of all Regulated Firms and have created a straightforward, cost-effective solution that is available to all, regardless of size. This ground-breaking initiative further underlines our
position as the leading provider of innovative, flexible instalment finance solutions in the UK ".