Intermediaries need a consistent approach to the charges levied for FOS and FSCS membership later this year as costs for most advisers will be significantly higher, argues the Association of Mortgage Intermediaries.
CP04/4 published last week by the Financial Services Authority - Mortgage firms and Insurance intermediaries: Funding of the Ombudsman and Compensation schemes – suggested intermediaries could in future receive a single invoice to cover the costs of complaints-handling by the Financial Ombudsman Service and the Financial Services Compensation Scheme.
Such as a proposal has sparked concern at the AMI, however, as mortgage intermediaries who also conduct occasional insurance business will also be required to pay into two separate 'contribution groups' for FOS and FSCS and shell out an additional 50% levy if they wish to conduct insurance business too.
This FSA levy is already expected to be significantly higher than that previously paid to the Mortgage Code Compliance Board and MCAS, says Chris Cummings, director general of the AMI, as the allocation of costs need to be seen to be fair.
"With MCCB and MCAS becoming obsolete on Mortgage Day, it was inevitable that would become the complaints mechanism for the mortgage industry.
"Since the proposals for periodic fee calculations include payment of the full amount for a firm's core area of business - with additional areas subject to a 50% discount - incorporating this 'secondary activity discount' into FOS and FSCS contributions would be a fair, consistent and proportionate approach,” says Cummings.IFAonline
Succeeding co-founder Simon Rogerson
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