Do self-employed mortgage advisors have to pay the Financial Services Compensation Scheme (FSCS) levy?
November 20, 2025 by Alan
Mortgage Advisors
Completing the CeMAP training course and qualifying as a mortgage advisor is an exciting moment for anyone. However, before you set yourself up in business to offer advice, there are legal issues that you must attend to. One of them concerns a levy under the Financial Services Compensation Scheme (FSCS). But is that something you have to pay if you are a self-employed advisor?
Do self-employed advisors need to pay the levy?
The answer to that question is that they are legally required to pay it. Any company that has been authorised by the Financial Conduct Authority (FCA) is obligated to pay the FSCS levy. This is true even if your mortgage advice firm consists solely of you.
There is a reason why the levy is applied to all FCA authorised companies and it is that the money is what finances the FSCS. This organisation does not receive any money from either the public or the government; it is entirely funded by the financial services sector. That makes the levy absolutely crucial to its continued operation.
The two primary components of the levy
There are two primary components to the FSCS levy:
Operating costs/management expenses
The first thing that the payments are used for is to cover base costs, including management expenses. All financial services firms must contribute towards this – regardless of their income for the year.
Compensation costs
The second component is funding compensation payments to those customers who are victims of failed finance companies. There are exemptions that can apply to this part. For instance, an advice firm that is newly FCA authorised may be exempt.
What amount a company has to pay depends on two factors: its business ‘class’ and the amount of business it has transacted. A mortgage advice firm falls under the ‘home finance intermediation’ class. Another reason why such a firm might be exempt from paying the compensation part of the levy – or have their payment reduced – is if no advice firms have failed or faced claims for compensation.
A self-employed mortgage advisor with FCA authorisation will have to pay the levy, but may be exempt from part of it depending on circumstances.
Written by
Alan
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