MPs campaigning for better compensation for Arch Cru investors will try to broker a blanket deal on redress to avoid the Financial Ombudsman Service being flooded with claims against IFAs.
Members of the All Party Parliamentary Committee on Insurance and Financial Services met with FOS chief executive Natalie Ceeney and chief ombudsman Tony Boorman on Tuesday to discuss Arch Cru investors' redress.
At the meeting in Westminster, Conservative MP Alun Cairns said member are pressing the FSA "to bring together all parties so that we can avoid thousands of complaints going to the financial ombudsman".
Cairns is one of the inner core of MPs who have set up an All Party Parliamentary Group on Arch Cru to push Capita, HSBC and BNY Mellon contribute more to the £54m payment scheme they have set up for investors.
At the meeting he appealed for an industry-wide approach to simplify and speed-up the compensation process.
Investors argue the Capita deal will return less than 50% of their original investment. This figure relies on further returns from the sale of the fund's assets.
IFAs fear investors will bring claims against their adviser at the FOS to make up the rest.
The FOS has so far received 150 complaints on Arch Cru. It has made a preliminary judgement in one case, in which it found an adviser gave poor advice and should pay the investor compensation.
Ceeney told the APPG she is eager to avoid the service having to deal with the onslaught of another mass mis-selling claim.
Half of the cases the FOS has dealt with in its entire history down are down to mis-selling, Ceeney told the APPG.
Boorman said in each Arch Cru complaint the FOS would unravel how much of the investor's loss was down to bad advice on the part of an IFA and how much was down to other factors at the fund.
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