A group of 19 former and current Positive Solutions advisers have rejected demands from the firm to contribute to the cost of settling with the FSCS over Keydata.
PosSol has written to advisers saying they must cover the professional indemnity insurance excess costs incurred by the firm after it reached a settlement with the FSCS in its legal battle with advisers.
One letter, seen by Money Marketing, shows an adviser being asked to contribute tens of thousands of pounds. The letter adds that PosSol has negotiated a reduced policy excess of up to £2,750 per case for Keydata, compared with a standard excess of £5,000. It adds that settlement with the FSCS “was done to protect advisers involved from potential significantly increased costs and personal liability”.
The group of 19 advisers, including three still with PosSol, are being represented by regulatory consultant Evan Owen, former chairman of the IFA Defence Union.
The group says Keydata recommendations were approved by PosSol so it should meet the costs of settling claims.
Owen says legal opinion from a third-party barrister supports the argument that the advisers are not liable to cover the costs of settlement. He says any advisers who have settled with PosSol should seek to recover the amounts.
PosSol declined to comment.