Panacea Adviser founder Derek Bradley has said disunity in the financial advice industry is making achieving a long-stop “increasingly difficult”.
The introduction of a product levy to replace the Financial Services Compensation Scheme levy could be more likely, he suggested.
FSCS levies cover the cost of paying for claims against advie firms that have gone bust, often under the weight of complaint claims against them.
Earlier this year, the FCA published the final report of the Financial Advice Market Review which ruled out a long stop.
The regulator concluded a 15-year limitation would only prevent a relatively low number of complaints from being brought and those consumers who would be affected would face “significant individual consequences” from a long-stop.
Mr Bradley admitted it would be difficult to achieve a long-stop now, but said representation of the advice industry is still “not what it should be”.
He noted the fact the Association of Professional Financial Advisers is now joined by rival adviser association Libertatem, although this means advisers are “disparate” and have many different agendas.
“Representation has not been as good as it could have been over the years. I would think the [FSCS] product tax is more likely to happen soon.
“Getting a long stop requires a concerted efford on a united front and I think that’s going to be increasingly difficult because advisers themselves find it hard to have a united front.”
Mr Bradley said the lack of a long stop puts the adviser at a disadvantage. “If you want to have everyone liable for everything forever then change the law, but you cannot have a limitations act which has that element removed.
“I think the long stop is something that absolutely has to be there,” he commented. “You cannot have an area of society that’s not subject to the same laws as everyone else.
“I think there is a shortsightedness with those who have not been in the industry for a long time. It is very difficult when you have got someone complaining who may or may not have a strong case.”
Matt Harris, director of Edinburgh-based Harris Independent Financial Advice, said: “I am not convinced by the need for a long stop.
“I can see why advisers want to be able to retire and know there are not going to be complaints coming out of the woodwork but at the end of the day if the adviser gave unsuitable advice 20 years ago and it has taken this long for the client to realise it doesn’t really seem fair for the adviser to be able to escape that.”
