Mortgage and protection customers could end up being the biggest losers if advisers do not respond to the FCA’s consultation paper this month, First Complete and Pink have claimed.
The FCA has increased the amount it levies from the life and pensions pot every year since it was introduced in 2012 and plans to increase the levy again by a further £171m next year. The networks have wanted that while some of this cost will come directly from mortgage businesses’ profits, most could be passed down to customers in the form of higher prices and indirect service charges.
Both networks are therefore calling for appointed representatives across the industry to respond to the paper, which will examine how the current Financial Services Compensation Scheme (FSCS) is funded. The consultation period closes on 31 March.
Toni Smith (pictured), sales operations director of First Complete and Pink, said: “The FSCS’s life and pensions levy is drastically increasing the cost of doing business for mortgage businesses each year. Mortgage and protection intermediaries are having to factor in the cost of insuring pensions products – products they are not even licenced to sell – into their business models.
“With the number of pensions compensation claims forecast to rise, these costs will inevitably trickle down to customers. Brokers therefore have a responsibility to engage with the FCA’s consultation paper to ensure that their customers don’t foot the FSCS bill.”
Brokers can respond to the FCA’s consultation paper at the FCA website and answer Q14: What are your views on the different funding classes we have set out here? Do you have any alternative proposals?
The survey can be accessed here: https://www.fca.org.uk/cp16-42-response-form