The UK Financial Services Compensation Scheme, which pays compensation to consumers if a company is unable to, is to cut the levy it gets fr...

The UK Financial Services Compensation Scheme, which pays compensation to consumers if a company is unable to, is to cut the levy it gets from financial firms. The fund said it would levy £160.7 million ($300 million), compared to an original forecast of £202.9 million. But wealth managers say they pay too much. Financial groups such as insurers, banks, fund managers and stockbrokers fund the FSCS but many have complained about having to pay for the sins of the larger retails groups after the recent bear market threw up thousands of compensation claims. In the 2004-2005 financial year, financial firms paid out around £238 million to the FSCS. The Financial Services Authority, the UK financial regulator, said it would discuss with industry members later this month whether a review of the current fee structure should be considered, which could eventually mean that some firms pay more and others less. “What is happening at the moment is that private client stockbrokers and wealth management firms are being requested to pick up the tab for failures of totally different types of institutions,” Angela Knight, the chief executive of APCIMS, the UK stockbroker association, said in a statement. She added: “This is manifestly unreasonable as our legal advice confirms.”