PIMFA, the trade association for wealth management, investment services and the investment and financial advice industry, welcomes the fact the UK’s Financial Conduct Authority (FCA) has “recognized current levels of Financial Services Compensation Scheme (FSCS) funding are unsustainable and is committed to reform. But current proposals lack ambition.”
Liz Field, Chief Executive of PIMFA, stated:
“Current levels of FSCS funding are unsustainable for well-run firms and indicative of a wider issue whereby consumers continue to be let down. We welcome the fact that the FCA has recognised this problem, as well as the role poor regulation has historically played in contributing to that.
Field added:
“Setting out a set of principles for reform is welcome and we are committed to engaging with this process in order to achieve the best possible outcome for consumers and our members. However, it is disappointing that some of FCA’s proposals today amount to a checklist of existing, and in some cases ill-defined initiatives, which have not in most cases contributed to the significant increases we have seen in FSCS claims.”
Field also noted that if the industry does need to put up with a higher levy for a few more years “in the hope that eventually things will get better, as this review intimates, we believe that there should have been more ambition shown around alternative sources of funding to bring down the current total cost.”
Field also mentioned that they have been clear with the UK Government and the Regulator that “the use of FCA fines would embody the polluter pays model, which they have previously expressed as an ambition and its absence remains a mystery as others continue to pollute and our members continue to pay.”
As noted in the update, PIMFA – the Personal Investment Management & Financial Advice Association, is the trade association for firms that “provide investment management, investment services and advice to everyone from individuals and families to charities, pension funds, trusts and companies.”
The sector currently “looks after £1.65 trillion in private savings and investments and employs over 63,000 people.”
PIMFA represents both “full and associate member firms.” Full members “provide a range of financial solutions including financial advice, portfolio management, as well as investment and execution services.” They assist everyone “from individuals and families to charities and pension funds, all the way to trusts and companies.” Associate members “provide professional services to the PIMFA community.”
PIMFA leads the debate “on policy and regulatory recommendations to ensure that the UK remains a global centre of excellence in the wealth management, investment advice and financial planning arena.”
Its mission is to “create an optimal operating environment so that its member firms can focus on delivering the best service to clients, providing responsible stewardship for their long-term savings and investments.”
PIMFA has made numerous recommendations “to the FCA regarding the Future of Advice, the Future of Supervision, & the FSCS levy.” PIMFA was created in 2017 “as the outcome of a merger between the Association of Professional Financial Advisers (APFA) and the Wealth Management Association (WMA) with a history as a trade association since 1991.”