Financial Services Compensation Scheme adverts


Article by Phil

In an interesting turn of events, the Financial Services Compensation Scheme (FSCS) decided to run some adverts on Twitter a couple of weeks ago (20th January 2020) asking the public if “they thought they were entitled to compensation”. This is interesting because the FSCS is funded by a levy on the Financial Service industry, paid by adviser firms including ours. So, the image of an industry funded organisation publicly advertising for claims against its own industry certainly raised a few eyebrows, including mine.

The FSCS in its defence said that it was trying to make the public more aware of the fact that they could make compensation claims directly to them for free, rather than using third party Claims Management Companies (CMC’s), who can take up to 30% + VAT of a client’s compensation. In itself that’s fine and a good idea but the targeting and positioning and wording of the advertising could certainly do with more thought.

No one disagrees that the FSCS is required to protect consumers, but the costs of funding the scheme are increasing year on year and placing an ever-bigger burden onto adviser firms. Firms will have to contribute £213million next year which is a massive 13% increase. Adviser firms generally feel that in many cases the compensation does not result from bad advice. For example, the FSCS intends to compensate clients who lost money from sales of Minibonds, even though these sales were made by unregulated firms, not the regulated advice firms who are footing the bills. Which seems unfair. The Personal Investment Management and Financial Advice Association (PIMFA) went even further in the press this week suggesting that Financial Conduct Authority (FCA) supervision of financial services may not be fit for purpose because of its continual failure to prevent claims from company failures and unregulated advice.

They have a point.

All that ultimately happens is that firms have to pass these increased costs of regulation onto clients in the form of higher advice fees and charges, which in turn means that less people can afford to pay for advice, which is completely against the Government’s intention which is to reduce the advice gap.

The Benefit of Independent Financial Advice Explained

Why taking personalised financial advice is a good idea, both now and in the future.

If you have any questions about Financial Planning please feel free to give us a call on 01282 614444 or drop us an e mail to

Awards and Accreditations

Pension Transfer Gold Standard
Financial Vulnerability Taskforce
VF 23
Vouched For 2022
Vouched For 2021
Vouched For 2020
Vouched For 2019
Vouched For 2018
Vouched For 2017
Vouched For 2016
Vouched For 2015
Vouched For 2014

Overall and excellent service from Adele – thank you!

Mrs W

I have a sense of trust towards the people and the company. Thank you.

Mrs F

Adele has been professional and knowledgable, yet also personable and fun to spend a lot of time with! I wouldn’t hesitate to recommend her to friends and family.

Mrs C