The IFADU questions how the FSCS was allowed to intervene when the firm was not in administration. It argues that B&B should not have been declared in default until such a time. It argues that the Government railroaded through the B&B deal without regard to due legal process.
IFADU founder and chairman Evan Owen says it is unfair for IFAs to be put in a position where they may have to shoulder some of the cost.
The FSCS says it is unlikely advisers will have to pay higher levies to cover the costs in the first three years but it is a possibility in the long term.
Owen says: “Why should IFAs have to pay the price of the regulator declaring B&B in default? It had assets that were sold to Santander.
“For an IFA to be declared in default they would have to have no assets or anything that could be used to pay what was owed. Why is it a different story for B&B?”
The FSA refused to comment further on its decision to declare B&B in default, other than to say: “It is our duty to prot-ect consumers and we dec- lared B&B in default because it did not have the ability to fund itself.”