On top of huge increases in FCA fees, mortgage firms are being asked to pay for the despicable advice given by some investment advisers to place Self Invested Personal Pension funds into poorly performing unregulated investments. These pension advisers have taken the huge commissions and run for the hills leaving mortgage brokers who did the right thing by protecting their customer’s mortgage with life, critical illness and income protections cover to pick up the bill.
The structure of the Financial Services Compensation Scheme is a hangover from the day when the life companies picked up the bulk of any liability, but those days are long gone. We need a new agreement that more fairly reflects the structure of advice firms and our industry behaviour. To levy a £100m pensions bill on those who advise on protection is a long way from common sense. There will be a consultation on the Scheme next year and we need change.
In the meantime AMI will be working with FCA to ensure that all firms are properly reporting their income as the amount being charged to some mortgage advice firms seems disproportionate. Those IFA firms that advise on pensions, group life and individual protection should still be apportioning their income under the scheme and we will be checking this is the case.