The Consumer Panel today welcomed the latest FSA proposals for the funding of the Financial Services Compensation Scheme.

Today's proposals make the FSCS more robust and better in terms of viability and efficiency. It provides a practical option for widening funding, should there be a major failure in one area, without any sense of panic or special levy. It also spreads the costs more fairly amongst the firms operating in the appropriate sector. For example, an IFA that does 90 per cent insurance business and 10 per cent investment business will be more heavily levied if FSCS faces heavier claims in the insurance sector.

The Chairman of the Financial Services Consumer Panel, John Howard said:

"Knowing the FSCS provides a lifeboat for clients if a financial provider or advisor sinks without trace, helps to boost consumers' confidence in financial services. However the existing system of funding the scheme is a bit of a blunt instrument. The new proposals will create a fairer system. The most important thing for consumers is that the FSCS is financially strong and administratively efficient and that's what these proposals should achieve."

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