Aegon calls for providers to take greater share of FSCS burden

Financial product providers should shoulder a greater share of the burden of paying for the Financial Services Consumer Scheme (FSCS), according to Aegon.

Aegon calls for providers to take greater share of FSCS burden
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The pensions, insurance and fund management group has said firms such as itself benefit from the increased consumer protection and confidence the scheme brings as well as adviser firms and so should put in more. 

Providers and intermediaries alike have long criticised the levy scheme, which provides refunds to investors and deposit makers in the event of a repayment default by charging levies on the financial services industry. 

The intervention by Aegon comes as the FCA is consulting on possible changes to the FSCS rules including potentially adjusting levies to penalise those promoting higher-risk products. 

The changes also include potentially forcing providers to pay for some of the share of compensation for the collapse of intermediary firms, a move that Aegon has also backed. 

Aegon said its claims were supported by research by an Advisory Board and Panel it set up to gauge the views of financial advisers in the wake of its acquisition of fund platform Cofunds.

It said 70% of advisers believed product providers should pay a greater share of FSCS funding costs, and 93% favoured a risk-based levy system.

 

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