SIPP provider James Hay Partnership has written to clients saying it reserves the right to pass on the cost of the FSCS levy to them.
The FSCS interim levy for IFG Group, which owns James Hay, is around £940,000 as the industry is billed collectively for the failure of groups such as Keydata.
Its letter to clients reads: "In the event of a levy being made on any of the James Hay Partnership companies under the FSCS or any levy or taxation being imposed on us or the IPS product, we may recover from the IPS product an amount equal to the proportion of such levy or taxation that we may reasonably determine."
Richard Mattison, business development director at James Hay Partnership (pictured), says: "We have sent a letter to clients but this merely flags the possibility we may have to pass on the levy but no decision has been made yet."
A spokesman for James Hay Partnership adds many providers have a clause appropriating the cost of fees and levies to customers written into their terms and conditions.
Martin Bamford, managing director of Informed Choice, is campaigning against the way in which FSCS levies are appropriated.
He says: "This move from James Hay is an inevitable response to an FSCS levy which all businesses find impossible to accurately forecast.
"If you cannot budget for a massive regulatory expense like this, the only real option is to pass it on to your clients in some way. James Hay will probably find it difficult to do this in practice, as the FSA is unlikely to be happy with them creating an open-ended liability for clients.
"The clients themselves would be crazy to expose themselves directly to the risk of an unexpected fee."
‘Important to have an anchor’
Report to be written by TPR
Lack of innovation for solutions
Some 2,000 consumers affected