The wealth manager trade body PIMFA has said it is encouraging to see the FCA chairman acknowledge that the FSCS levy is at an unacceptable level.

In a recent “Dear CEO” letter the FCA chairman Charles Randell outlined its expectations during the Covid-19 pandemic.

PIMFA has campaigned for reforms to regulation and supervision and called into question the sustainability of the FSCS Levy. In January PIMFA also highlighted that the FSCS final levy of £548m for 2019/20 was close to the entire cost of running the FCA last year.

Liz Field, chief executive of PIMFA, said: “That the FCA chairman has acknowledged the need to redesign the current system so that it better protects ordinary retail investors from investments which are unsuitable for them, and ensures that firms which market unsuitable investments don’t pass the bill for their misconduct on to well-run firms is very welcome news.

“All well-run firms want to protect consumers from poor advice or outright scams and the FSCS levy has been a source of understandable resentment for those firms for a significant period of time. The implicit warning that the levy is likely to increase as a result of the current Covid-19 pandemic will however be a source of anxiety for many firms.

“PIMFA has already called for more engagement with the regulator and for better supervision for firms that need help and I would ask the FCA continues to work so a system that protects consumers but doesn’t punish well-run firms for the misconduct of others can be created.”