Chartered Institute for Securities & Investment  

CISI warns FCA of consequences from Fos limit hike

An FCA spokesperson said: "The new award limit will provide further protection for consumers and small businesses. 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 PII cover and need a short time to obtain this then we will consider their individual circumstances."

The FCA board meanwhile appeared amenable to the idea of a smaller number of advisers operating in the DB transfer space.

It also suggested this would mean the players left would provide "affordable advice", although advisers heavily contest this logic.

Scott Gallacher, director of Rowley Turton Private Wealth Management, who is in the middle of renewing its PII, said: "If advisers do face a big jump in their premiums, the cost of advice to clients will inevitably go up.

"We look after our clients well, but we’re not a charity. Costs have to be covered. You may also see some advisers leave the market, which is also detrimental to consumers as this will limit choice.

"Frankly, I see little justification in the FCA increasing the compensation limit. The compensation scheme was designed to protect those that couldn’t afford to take an adviser to court.

"Any company making a complaint worth £350,000 should have the resources to take the adviser to court themselves, which is the better route. The scheme has just grown to be some sort of monster."