Insurance broker charges likely to remain high amid gigantic bill for failed IFAs who mis-sold PPI
The huge bill for failed independent financial advisors (IFAs) and firms which mis-sold PPI has surpassed £1bn, the FT Adviser reports.
Customers who suffered poor PPI advice from IFAs which have gone bust are still turning in their droves to the Financial Services Compensation Scheme (FSCS).
The FSCS has in turn been billing insurance brokers who are put in the same regulatory class bucket as IFAs and credit brokers.
The FSCS has dealt with the default of 2,391 independent financial advisers since it was set up in 2001, while handling more than 165,000 claims.
Mark Neale, FSCS chief executive, said: “People rely on their insurance to protect them when things go wrong, and we protect their insurance if the worst should happen.”
According to calculations by Insurance Times, a medium-sized broker with a £4m revenue would have paid a £25,000 FSCS levy for the 2013-2014 year.