Posted on by Nigel Ross-Scott

Press Release

PIMFA comments on FCA CP18/11: Reviewing the funding of the Financial Services Compensation Service

1st May, 2018

PIMFA – the UK’s leading trade association for the personal investment management and financial advice sector – greatly welcomes the final rules concerning product providers contained in the Financial Conduct Authority’s Consultation Paper on the review of the funding of the Financial Services Compensation Service, released earlier today.

Following the continued work done by PIMFA (WMA/APFA), culminating in our response to CP 17/36 in January of this year, we have strongly lobbied for a fair and transparent system overall and do not believe that distributors should bear the whole cost burden alone. We are therefore gratified to see that the FCA have seen fit to make a final rule, to take effect in April 2019, “requiring product providers to contribute around 25% of the compensation costs which fall to the intermediation class.”

This rule represents a significant reduction in business costs, reducing the size of the overall pot to which our member firms have to contribute.

However, with such a sharp increase in the FSCS levy – up by £71m more than it forecast in its Plan and Budget in January – we feel that the FCA needs to demonstrate that it actively seeks to mitigate through its supervisory processes claims on the FSCS.

Ian Cornwall, PIMFA’s Director of Regulation, comments: “We are disappointed that the FCA has deemed investment firms providing discretionary management to retail clients to be product providers, which is incorrect”

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Notes for Editors

About PIMFA – the Personal Investment Management & Financial Advice Association

  • PIMFA is the UK’s leading trade association for firms that provide investment management and financial advice to everyone from individuals and families to charities, pension funds, trusts and companies.
  • PIMFA represents both full and associate member firms.
    Full members provide a range of financial solutions including financial advice, portfolio management, as well as investment and execution services. They assist everyone from individuals and families, to charities and pension funds, all the way to trusts and companies.
    Associate members provide professional services to the PIMFA community.
  • PIMFAleads the debate on policy and regulatory recommendations to ensure that the UK remains a global centre of excellence in the wealth management, investment advice and financial planning arena.  Our mission is to create an optimal operating environment so that its member firms can focus on delivering the best service to clients, providing responsible stewardship for their long-term savings and investments.
  • PIMFA was created in June 2017 as the outcome of the merger between the Association of Professional Financial Advisers (APFA) and Wealth Management Association (WMA) – read more.

To read any or all of PIMFA’s Consultation Responses, please click here

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