The Ministry of Justice says IFAs who give clients advice on claims against other firms must be authorised by the Claims Management Regulator.
The CMR, which is part of the MoJ, requires any person or firm that is providing a regulated claim management service to be authorised.
The MoJ says FSA-authorised firms such as IFAs do not need to be authorised by the CMR if they do no more than notify clients about the possibility of bringing a claim against a previous adviser as they will be regulated under the Financial Services and Markets Act.
But it says that firms providing a claim management service for which they are paid need to be authorised.
The MoJ defines claim management services as “advising a claimant or potential claimant in relation to his claim or cause of action”.
An MoJ spokeswoman says: “If an IFA is giving claim management advice, then they have to be regulated.”
The Ministry of Justice could not provide a figure for the number of IFAs who are authorised to provide claim management services but says that 210 claim management firms are also authorised by the FSA.
Philip J Milton & Company was authorised by the Claims Management Regulator earlier this month.
Managing director Philip Milton says: “We help people where we come across potential claim cases. We have to become registered to protect ourselves.”