The FSA has warned that it will not tolerate phoenixing by Arch cru advisers seeking to ditch their liabilities and return to the market under a different firm.
The FSA 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.
The regulator estimates that between 550 and 600 adviser firms sold Arch cru.
It says around 110 of those firms have already cancelled their permissions and it expects up to 100 more firms to default as a result of the opt-in scheme.
FSA head of investment intermediaries Linda Woodall says the regulator will monitor any attempts by Arch cru advisers to force liabilities onto the Financial Services Compensation Scheme and return to the market.
She says: “We have got measures in place on our system.
“If they start to come back into the industry, we will be able to make reference to intelligence on those people.”
Technology and technical founder and director Kim North says: “The FSA needs to keep a very close eye on advisers who purposefully try to avoid their liabilities by phoenixing.
“It is also something that accredited bodies should be mindful of when issuing statements of professional standing.”