Quite a mix-up regarding the levy. Earlier this week, the FCA suggested it was setting a target for the reduction of the levy by 10% by the year 2025 as part of the next phase of the consumer investments strategy.
The plan was to stabilise and then reduce major FSCS costs, as part of a wider goal to reduce consumer harm.
This was welcomed by advisers and provoked much conversation and debate. It then led to one of the chiefs of the FSCS saying they were not involved in the latest levy calculation.
Speaking to FTAdviser, FSCS chairman Marshall Bailey said the FSCS does not have a direct influence on the numbers quoted by the FCA but agreed the direction of travel set by the regulator was the right one.
However, he added: “10 per cent is the FCA’s number, I don't know if that's right or wrong, we weren't part of the calculation of that forecast, and probably we don’t want that precision.”
Trouble at the regulatory mill, so to speak.
By the end of the week, New Model Adviser was reporting that the FCA was rowing back on the 10% target.
To quote: “NMA now understands that the 10% target, which was early-stage thinking from the regulator, was published in error and the FCA will not be setting itself this specific levy cut target at this stage. Instead the FCA will use its review into the compensation framework later this year to decide on a new target after talking to the wider industry.”
To explain the ‘understands’, it is very suggestive that someone in the regulator has told NMA this is the case.
It is important to see if there are any on-the-record acknowledgements next week i.e. attributed to an actual person.
A bit of a mess all round and very much to the frustration of advisers no doubt.
Consultant Clive Waller asks “What is a platform?”
Then in more detail: “What will be the nature of that tech stack as we see new cloud-based platforms offering basic services such as custody and fund trading, joined together by APIs to supplying micro-services carrying out the other functions?”
Arguably this will prove to be one of the most of significant strategic decisions facing advisers in the next few years.
Last week we learned of the passing of advice pioneer Alan Steel. He is well known for clashing with the board of Equitable Life and some of the regulators as the insurer played fast and loose with its own capital position and despite this overcharged its members. He was also a very early pioneer of what came to be known as the new model of advice.
Steel was often scathing about regulatory costs. Yet it is important to remember this was as much in disappointment at the failure of statutory regulation to really improve things for consumers.
It is doubtful he would have been impressed with the current shenanigans over the FSCS. RIP Mr Steel.