The FSA has delayed its decision on whether to implement plans for a £110m Arch cru consumer redress scheme following an overwhelming industry response.
The regulator published its consultation on the redress scheme in April, which if approved will require advisers who recommended Arch cru funds to review their sales and pay redress where appropriate.
The FSA has reportedly been forced to delay issuing a policy statement on the scheme in the wake of the significant number of industry responses it has received since the consultation closed in August.
Money Marketing reported at the time the strength of industry opposition against implementing the proposed scheme. Association of Professional Financial Advisers policy director Chris Hannant challenged the FSA’s figures which stated 795 firms sold Arch cru affecting between 15,000 and 20,000 customers. Analysis of the statistician’s report published alongside the consultation suggests only 263 firms may have missold with between 7,500 and 14,100 consumers affected.
Minutes from FSA’s board meeting in April show some board members were concerned about the impact on clients if their adviser goes bust as a result of the scheme. The FSA estimates up to £33m could fall on the Financial Services Compensation Scheme.
The FSA declined to comment.