Advisers hit with £76m FSCS bill

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The Financial Services Compensation Scheme (FSCS) will levy an estimated £76m on investment advisers in 2013/4, with failed firm Keydata highlighted as one of the main cases contributing to the overall bill.

Keydata recovery costs are estimated to be £3.8m higher than budgeted for the current year at £7.7m, with a "similarly high level" of cost next year, the FSCS said. The body, which has launched legal action against advisers who recommended Keydata to clients who subsequently claimed for compensation, expects to recover £75m related to Keydata over three years. The total cost to the financial services industry as a whole is expected to be £311m, excluding the costs of the major bank defaults of 2008. That figure is up from the £265m total levy so far in 2012/13. FSCS chief executive...

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