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Aifa fears IFAs will be trapped in chaser rules

Aifa is lobbying the Department for Constitutional Affairs to ensure that IFAs carrying out normal business are not caught up in the regulation of claim management companies.

Consultation on the regulation of claim-chasers, to be included in this year’s Compensation Bill, closes at the end of August and Aifa is submitt-ing a response amid fears that advisers carrying out proper duty of care will unwittingly fall under the regulations.

Policy adviser Vera Cottrell says there is a concern that IFAs advising clients to complain about an endowment policy sold to them by a different adviser as part of a financial review might fall under the spotlight of the new regulator, depending on how the legislation is worded.

Cottrell says some advisers that have set themselves up as claim management firms will rightly fall under the new regulation but the legislation must be made clear to ensure that the majority are exempt.

Financial Ombudsman Service spokeswoman Emma Parker says a significant number of endowment complaints come from advisers recommending a complaint against a client’s former adviser.

Cottrell says: “We are happy with the majority of the Compensation Bill but, as part of our submission, we will be highlighting this issue and looking to ensure that advisers recommending clients to complain about a missold endowment are not caught up in the new regulation.”

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