The FSA insists the board “fully endorses” the regulator’s decision to go ahead with a revised version of its Arch cru consumer redress scheme, despite earlier concerns about the cost pressures the scheme would place on advisers and the Financial Services Compensation Scheme.
The regulator published a policy statement on its Arch cru consumer redress scheme this week. Under the amended scheme, firms have to write to clients who were recommended Arch cru and clients have to opt in to have the advice reviewed.
Minutes from the FSA’s board meeting in April, ahead of the consultation being published, revealed the board’s concerns about cost pressures.
The board said the FSA needed to bring a “convincing case” for the scheme to go ahead.
Speaking to Money Marketing, FSA head of investment intermediaries Linda Woodall says: “It was not an easy decision. The fundamental questions were has the legal test been met, do the benefits outweigh the costs, and comparing this to pursuing individual cases through courts, is this a more efficient and effective way to get money to investors who are due redress. This decision is one the FSA board fully endorses but it was obviously a complex issue and one that required a significant amount of discussion.”
Association of Professional Financial Advisers policy director Chris Hannant says: “We are still not satisfied the regulator has made the case for a consumer redress scheme.”