Adviser Alliance has donated £500 towards a judicial review into the FSCS Keydata levy - even though the lobby group thinks the legal action has little chance of success.
The move follows a High Court ruling giving law firm Regulatory Legal the go-ahead to launch its judicial review into the FSCS's £58m compensation bill to cover the failure of investment ‘provider' Keydata and two stockbrokers.
But despite the pledge of support, the anti-RDR group has grave misgivings about the action and thinks the hearing - expected in the autumn if enough funds are raised - will likely fail.
Adviser Alliance has until now refused to lend its support to the legal action, deciding against signing up to Regulatory Legal's fundraising campaign.
Whilst the not-for-profit organisation has maintained the FSCS's decision to impose the levy on the intermediary sub-class was unfair, it has argued the decision was technically legal and any review would therefore be doomed to failure.
It has also said it has more pressing issues on its agenda, such as challenging the lack of a 15-year long-stop provision and commission ban.
But founder Alan Lakey (pictured) denies the decision to donate £500m to the judicial review is a U-turn, but rather represents a showing of solidarity for the industry it represents.
"The judicial review has little chance of success, although stranger things have happened," he says. "But given nothing is impossible, given the concerted view of advisers enough is enough and given we have set up as an adviser-supporting lobbying group it seemed appropriate to assist without being involved.
"As a body, it is important we show solidarity with other firms."
Adviser Alliance said in a statement it is dipping into its funds because the FSCS is in need of a drastic overhaul and advisers need its support.
Lakey says the decision was also taken in light of the lack of support from AIFA and the IFA Defence Union.
He adds Adviser Alliance might provide further funds should future circumstances warrant this.
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