Financial Conduct Authority  

FCA will not postpone Fos limit hike

FCA will not postpone Fos limit hike

The Financial Conduct Authority has confirmed it will not be delaying the implementation of the Financial Ombudsman Service's compensation limit rise, despite facing calls to do so earlier this week. 

Yesterday (March 25) the Personal Investment Management & Financial Advice Association urged the regulator to postpone its plans to increase the maximum amount consumers can claim through the ombudsman from £150,000 to £350,000 on April 1. 

The adviser trade body asked the FCA to revisit the impact of the changes on the professional indemnity insurance market for advisers, warning a number of insurance companies were not yet in a position to confirm whether or not they will be able to offer terms "reflecting the increased limit". 

Today (March 26) the regulator confirmed it would not be delaying the implementation, but said it would consider the individual circumstances of companies which needed a "short time" to obtain different PI insurance. 

An FCA spokesperson said: "The new award limit will provide further protection for consumers and small businesses and we will not be delaying its implementation.

"We consulted thoroughly before deciding on the new rules and firms have had sufficient time to discuss cover with insurers.

"If firms do need to obtain different PI insurance cover and need a short time to obtain this then we will consider their individual circumstances."

In its appeal to the regulator Pimfa warned it was concerned many companies currently seeking to renew their cover will not be able to obtain cover reflecting the increased Fos limit by April 1.

Following the regulator's decision to proceed with its changes to the compensation limit, industry experts warned the FCA had underestimated the potential impact on the industry with suggestions the increase could see more consumers left to fend for themselves or becoming victims to scams.