Advisers have given a cautious reaction to the Financial Conduct Authority’s (FCA) “polluter pays” redress consultation released this morning (29 November), with some sceptical the proposals will work well for small firms.
The proposed shake-up to investment advice compensation rules, set out in a consultation paper Capital deduction for redress: personal investment firms, and a Dear CEO will see firms being forced to set aside capital under a "polluter pays" framework. The regulator said the proposals meant firms would be required to set aside capital so that they can cover compensation costs and "ensuring the polluter pays when consumers are harmed". The plans would mean personal investment firms - otherwise known as investment advisers - would need to calculate their potential redress liabilities "...
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