All-party Parliamentary group on Arch cru secretary Alun Cairns says the FSA should not hold IFAs so heavily responsible for client losses.
Last month, the FSA launched a consultation on establishing a £110m redress scheme for Arch cru investors.
If it goes ahead, around 795 IFA firms will have to review all cases and pay redress where advice was unsuitable. The FSA estimates up to 30 per cent of the IFA businesses could default as a result.
It comes on top of a £54m compensation scheme funded by authorised corporate director Capita and depositories BNY Mellon and HSBC.
Speaking to Money Marketing, Conservative MP Cairns says the FSA and the Guernsey regulator, which supervised the cell companies that invested the capital in the funds, should push Capita, BNY Mellon and HSBC for a better deal for investors. He says: “Holding IFAs responsible for the failures of many stakeholders regulated here and in Guernsey may not be wholly fair. I hope the Guernsey Financial Services Commission and the FSA bring about a negotiated settlement between all those firms responsible.”
Cambourne Financial Planning director Mark Loydall says: “If a third of these firms do default, it will be the innocent firms that pick up the pieces and that cannot be fair.”