The FCA noted the consumer investments market is responsible for most of these liabilities, with claims arising from the LDII and Investment Provision classes accounting for around 72 per cent of this (£618m).
These liabilities have led to both the LDII and Investment Provision classes breaching their funding limit for the last two years. As a result, firms from across retail financial services are having to contribute to costs being generated by firm failures originating in other funding classes.
The FCA said improving the quality of advice given or the ability of the firm to cover the cost when it does make a mistake can, over time, reduce the burden of FSCS costs.
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