Caroline Rainbird, the CEO of the FSCS appears to set her face against significant reform of the scheme in this interview. She suggests that it is better to reduce poor outcomes and educate consumers against scams in an interview with FTAdviser rather than reform the FSCS funding.
She said: "Where I want to focus, and where I think we collectively need to focus, is not on shifting the payment of the levy around, although I do not want to sound as though I do not understand the challenges in this.
“I want to make sure we collectively spend enough time thinking about how we can reduce the level of compensation being paid out as well as the number of bad outcomes and how we can increase the number of positive experiences that consumers have.
“Shifting [the levy] around does not go to the heart of the problem.”
This does seem to run against the views of FCA personnel including the chairman who want to shift to a polluter pays system.
There are many ways to argue against this stance – advisers aren’t asking for a wholesale funding shakeup but for the system to make doing risky business more expensive.
In addition, improving outcomes is a long term project while educating consumers to the extent they can resist scams a huge task. Changing the scheme might be an easier option.
Interesting to see if advisers and trade and professional bodies respond.
More on the scheme, this time in Money Marketing. It is struggling to make payouts to LCF investors and using Capita and artificial intelligence to sift 700,000 phone calls.
Of course, this will be to assess whether LCF or its marketing firm offered advice. They weren’t regulated to do this, but that doesn’t seem to have put off the FSCS from offering compensation.
The FCA has offered respite to those with maturing interest only mortgages due to the current crisis.
It has issued temporary guidance requiring lenders to allow borrowers with maturing interest-only or part-and-part mortgages to delay capital repayments until October 31st next year.
The guidance applies to borrowers with interest-only and part-and-part mortgages that have matured between March 20, 2020 and now and will be maturing until October 31, 2021, who are up-to-date with their payments.
This next story begins to feel like a significant move in the direct to consumer investment market.
Fidelity buys LGIM’s £6bn Personal Investing arm adding 300,000 clients and £5.8bn assets under management (AUM).
Fidelity’s UK direct-to-consumer business currently has 280,000 clients with £20.3bn in AUM. Interesting to compare the average assets of clients.
Following the recent purchase of Cavendish Online, just a few weeks’ ago it begins to feels like a big push by Fidelity.