Regulatory Legal says adviser inertia threatens to derail its campaign to mount a judicial review into the FSCS's decision to increase levies to meet the £70m costs of failed Keydata.
The law firm is pursuing a judicial review against the FSCS's decision to levy the investment intermediation sub-class to meet the costs of the collapse of Keydata and two stockbrokers.
Following a letter Regulatory Legal sent to the FSCS on February 18 asking for a breakdown of the decision-making process, partner Gareth Fatchett says he is expecting to hear from the compensation body next week.
He says: "I imagine we will start protocol actions that same week or the week after and proceed with the judicial review by mid-late March."
But although Fatchett says the campaign - which is dependent on IFA funding - is gathering momentum with 400 IFAs saying they will join up, he also says adviser apathy is proving a major obstacle.
"The main problem we are experiencing is the divided nature of the IFA community," he says. "Our concern is IFAs will defeat themselves with too much talking and not enough doing. IFAs think the FSCS will just roll over. The IFA community can be very bad at organising and representing itself."
He adds the firm has encountered problems with adviser representative groups which have "not been very helpful" by suggesting the legal community is merely out to profit from the fallout following the FSCS levy.
Regulatory Legal is challenging the FSCS's levy on three grounds: a lack of consultation, incorrect allocation of sub-class and the 30-day deadline advisers have been given, from the end of March, to find their share of the levy.
100 new clients
Achievements, charity work and other happy snippets
Square Mile’s series of informal interviews
Partner Insight: The rise in demand for DFM and multi manager solutions has been largely driven by new mandates from the regulator, says James Bampton, head of UK intermediary distribution at Architas