The Financial Services Compensation Scheme (FSCS) has hit investment advisers with a £105m levy for 2014/15, an increase of 34% on the last levy.
This is up from last April's figures when the FSCS said it would levy a £78m bill on investment advisers in 2013/4, with failed firm Keydata highlighted as one of the main cases contributing to the overall bill.
The FSCS blamed the increase announced today in part on compensation claims triggered by the collapse of ARM traded life settlement distributor Catalyst.
The levy for life and pensions intermediaries was also up by £27m, from £13m last year to £40m for the coming period. The FSCS said this was because the level of claims it is receiving "indicate a rising trend".
Elsewhere in its 2014/15 plan and budget, the FSCS said financial services companies will pay £313 million to cover the costs of compensation, up from £311 million in 2013/14.
It also confirmed an announcement in November that the investment advice community will be billed a £30m interim levy this year, mainly covering the cost of the Catalyst Investment group failure, which was declared in default in October.
Compared to the 2013/14 annual levy, levies for two sectors will reduce and costs will increase in five sectors, the FSCS said.
The 2014/15 levy is the first to be calculated under the new 36 month funding approach.
Figures published show that under the old approach the adjusted levy for investment intermediaries would have been £29m less, at £75.9m.
However, any surplus or deficit created by this year's levy will form the opening balance of the calculation for the next year, the FSCS said.
FSCS chief executive Mark Neale said: "Our mission is to provide a responsive, well-understood and efficient compensation scheme for customers of financial services, which raises public confidence in the industry.
"2014/15 marks the first time we will calculate the annual levy with our new 36 month funding approach. An approach we believe will go some way to reducing volatility of annual levies and provide the industry with greater certainty.
"This year will also see FSCS continue to modernise its claims process, enabling consumers to engage with us on-line. This will deliver a better service for consumers and improved efficiency for levy payers."
Responses to the Plan and Budget may be sent to [email protected] by 21 February 2014.
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