The Association of Professional Financial Advisers (APFA) has said it hopes a new approach to funding the Financial Services Compensation Scheme (FSCS) will mean lower overall contributions from advisers in the long term.
Director general Chris Hannant (pictured) said the new method would remove the need for further interim levies and mean part of future annual levies had been paid in advance.
Combined, this will smooth payments out, he suggested.
Introducing the new 36-month funding approach, the FSCS this week hit investment advisers with a £105m levy for 2014-2015, some £29m above what it would have been if calculated under the old one-year approach.
But Hannant said: "We hope that the long-term situation for advisers might not be as bad as this headline number suggests.
"Under this new approach, the FSCS is more likely to ‘over-levy', removing the need for an interim levy next year and should mean some of the following year's levy is paid in advance. All of which should, in the long term, smooth payments."
However, Hannant said he was concerned the size of the levy was based on Catalyst's failures and subsequent compensation payments.
APFA questions whether these failures should have been reflected in a higher levy for intermediaries, he said, while suggesting he would be "liaising closely with the FSCS over the coming months" to review the issue.
The FSCS outlined in its forward looking business strategy that it would be more open with the industry about potential impacts of business failures and future levies.
The levy for life and pensions intermediaries was also up in this week's budget, from £13m last year to £40m for the coming period.
However, the class is currently still levied according to the old approach. The FSCS said this was because the level of claims it is receiving "indicate a rising trend".
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