Back to all announcements

IFAs criticise costs increase

Independent financial advisers (IFAs) have hit out at plans to raise the levy they pay to the Financial Services Compensation Scheme (FSCS).

In order to counter extra costs associated with financial mis-selling claims, the FSCS said it would be increasing the fees paid by IFAs to a collective £47.5 million from £37.8 million.

The FSCS argues it is simply transferring the costs incurred by a rise in claims made on the basis of mis-selling.

However, the Association of Independent Financial Advisers (AIFA) claims that many advisors accused of mis-selling endowment policies have gone out of business, placing the burden of compensation on innocent IFAs.

Director-general Chris Cummings told the Times: "It's a great shame that a disproportionate burden is falling on firms that have done nothing wrong."

Meanwhile, IFAs have also been hit with the news that the Financial Services Authority (FSA) is planning on raising its annual fees by between one per cent and 2.5 per cent.