PIMFA, the trade association for investment managers and financial advisors in the UK, has today called for an urgent review of the Financial Services Compensation Scheme in the wake of yet another emergency levy that it expects the industry to pay.

This levy, for £69 million, is partly due to claims related to pension transfers being higher than expected. It is completely separate from the service's previous announcement in May that it will have to shoulder costs of £407 million more than its previously forecasted £336 million.

PIMFA believes that the FSCS is not tackling the root cause of these claims. Nobody knows whether the FSCS follows through in its efforts to obtain money from the professional indemnity providers that have given insurance cover to the now-moribund firms whose victims it compensates.

The trade body also believes that these frequent and unexpected calls for extra cash are creating an intolerable situation for firms, frustrating their attempts to plan and budget for their future.

Liz Field, the CEO of PIMFA (pictured), said: “Unexpected levy increases of this magnitude cannot be part of a long-term and sustainable funding option for the FSCS.  Member firms need to be able to plan their own finances and be confident that the relevant regulator is taking pro-active steps to address the root causes of increased FSCS claims, not just the symptoms. We know the levy is complicated, but the industry needs to work with [the] FSCS on a model that works for firms. We need this situation clarified.”