The reform, agreed at the FSA’s latest board meeting, would see costs spread more evenly across the financial services industry resulting in fees for some advisers falling by around 50 per cent.
AIFA director general Chris Cummings says the Compensation Scheme is a vital regulatory safety net but is in need of urgent reform if it is to continue to deliver its objectives.
He says: “We are extremely pleased that they are pressing ahead with reform despite opposition from certain sections of the industry. We will soon have a fairer and more robust Compensation Scheme, which will benefit consumers and the industry.
“We hope the FSA will implement these reforms at the earliest opportunity. From the initial figures set out in the Review, many IFAs could see the current FSCS bill of £1200 per head fall by around 50 per cent.”