You will shortly receive your invoice from the FCA for 2018 and will notice an increase of 96% - 113% in the Financial Services Compensation Scheme (FSCS) Levy.
For some Directly Authorised firms it will mean paying around double, if not more, than you have previously paid. Even if you have stood still or even slightly decreased your income from regulated products your FCA fees will increase.
The FSCS is delivering higher levies (to cover a £24m supplement due to an increase in SIPP related claims) that will affect all Directly Authorised motor dealerships. If you are a Directly Authorised firm selling general insurance the chances are you will have to pay an awful lot more for, little to no gain.
It is understandably hard to stomach having to pay a bigger bill that has come about through compensating for others’ bad practice. So is there an option not to pay? Sadly not, if you remain Directly Authorised.
The good news is that you do have another option, but you’ll need to act fast!
If you submit your application to cancel your Part 4A permission for general insurance before 31st March 2018 you will have 6 months to work with a Principal firm to become an Appointed Representative (AR) instead. Submitting the proposed cancellation will halt your 2018 FCA invoice and will avoid having to pay the levy increase.
Cancelling Part 4A permission
If you submit your cancellation form before 31 March, you will not be liable for the following year’s fee and your permission will be cancelled in line with our statutory deadlines. We do not give refunds or credits if you cancel after 31 March.
Sorce FCA website
Automotive Compliance Ltd will work with you on re-investing your money to protect and grow your business.
As well as avoiding paying towards compensation for bad practice, you will also no longer be directly answerable to the FCA. Does handing over the risk AND potentially saving yourself some money while protecting your business sound like a sensible alternative? If you want to know more about the increase in fees or discuss how to become an Appointed Representative, then please give us a call. We will be happy to help.
ArchiveInsurance Distribution Directive October 1st 2018 CPD
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