Advisers will pay out a total of £31m in compensation under the FCA’s Arch cru consumer redress scheme.
The FCA says 48 per cent of customers have opted into the scheme. The regulator has given the all-clear to firms with low opt-in rates, saying a sample review of firms found nothing of concern.
In October the FCA raised concerns that opt-in rates for its Arch cru consumer redress scheme, launched last April, were considerably lower at some advice firms compared to others.
The regulator wrote to a sample of 30 adviser firms asking them to explain why their opt-in rate was significantly below the industry average.
A spokesman for the FCA says: “We wrote to firms and some of their customers to make sure there was no reason why opt-in rates would be lower. We found nothing that caused us concern.”
The redress scheme required all firms which advised on Arch cru funds to write to affected clients inviting them to opt in.
In December 2012, the FCA estimated the opt-in rate would be between 15 and 30 per cent, reducing redress from an estimate of £110m for its initial scheme proposal – under which consumers did not have to opt-in – to between £20 and £40m.
The FCA says 3,414 sales have been reviewed, of which 86 per cent have been found to be unsuitable. Some £8.3m has been paid in redress so far.
FCA director of supervision Clive Adamson says: “The vast majority of firms have co-operated with us. We will continue to monitor progress to ensure consumers affected by Arch cru receive redress as quickly as possible.”
Capital Asset Management chief executive Alan Smith says: “It is encouraging to see advisers with low opt-in rates were not at fault.”