City & Corporate: Hanover wins FSA work

Six-figure brief awarded by FSA compensation scheme.

In the week Chancellor George Osborne outlined plans to scrap the Financial Services Authority, it has emerged the compensation scheme that the FSA administers has hired an agency to embark on a major PR drive.

The Financial Services Compensation Scheme (FSCS), which protects UK investors' money if a financial services firm collapses, has handed a six-figure brief to Hanover to increase public understanding of the scheme.

The FSCS is currently administered by the FSA, but look likely to fall under the remit of the soon-to-be created Consumer Protection and Markets Authority.

The scheme will press ahead with a major stakeholder engagement drive, despite the regulatory upheaval and change of Government.

Hanover won the account after a competitive three-way pitch run by the COI. It is thought Citigate Dewe Rogerson and Fishburn Hedges were also on the final shortlist.

The account is one of the few significant pitches managed by the COI in recent months after the new Government pledged to crack down on public spending, but notably the FSCS is funded by the industry rather than the public purse.

The FSCS was set up in 2001, but has seen its profile leap since the start of the financial crisis. The scheme paid out £1bn until September 2008, but this increased to more than £21bn in the subsequent six months after the failure of five banks and a building society.

Hanover MD Charles Lewington will lead the account, reporting to Mark Oakes, head of comms at the FSCS.

Lewington said: 'One of the paradoxes of any scheme is it is always best understood during a crisis when people have to claim compensation. The challenge to the organisation is to ensure that awareness remains high during periods of stability, as well as during periods of turbulence.'

Full industry support for the scheme is also seen as crucial, but some institutions have raised concerns over funding issues. Notably, Graham Beale, chief executive of Nationwide, has complained over the disadvantages building societies face in the way they contribute to the FSCS.

After worried savers caused a run on Northern Rock in 2007, the FSCS was beefed up to guarantee the first £35,000 of a saver's deposit, which was subsequently increased to £50,000.

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Already registered?
Sign in