The Financial Conduct Authority (FCA) has proposed a shake-up to investment advice compensation rules which will see firms set aside capital under a “polluter pays” framework.
The regulator set out its plans in a consultation paper, Capital deduction for redress: personal investment firms, and a Dear CEO letter today (29 November). It said the proposals mean firms will be required to set aside capital so that they can cover compensation costs and "ensuring the polluter pays when consumers are harmed". It explained the plans would mean personal investment firms - otherwise known as investment advisers - would need to calculate their potential redress liabilities "at an early stage", then set aside enough capital to meet them and "report potential redress li...
To continue reading this article...
Join Professional Adviser for free
Signup and gain exclusive members-only insights
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes
