BRITISH STEEL NON CLAIMS WILL RESHAPE THE IFA INDUSTRY
Written on 29/07/2022
BRITISH STEEL NON CLAIMS WILL RESHAPE THE IFA INDUSTRY
British Steel is a fireship for IFAs, drifting this way and that - ready to spread. The FCA proposals on the table are for compensation to be paid to victims – nothing new in that – but they have stated they want compensation paid out regardless of whether a claim is made by the victim. Many have been ripped off, but they are not all "victims," and if they are not claiming or complaining even after being approached and encouraged to by letter then this puts the PI insurers into a difficult position. Their policies are not set up to cover for these so called section 404 events of enforced compensation or "helicopter cash" and they legally have no obligation to pay. If they did pay, they would almost certainly withdraw from the market, leaving chaos for all, and if they do decide to pay, then there are literally hundreds of IFA firms that will fail. For the IFA industry, interesting times lie ahead.So how does the ordinary IFA running a business take advantage of the situation? The evidence suggests that hundreds of IFA firms will fail, falling onto the FSCS and hundreds of RIs – maybe even a thousand - will be looking for work. The FCA have implicitly signalled this by putting an asset freeze on the larger IFA firms affected. Some reports name 343 IFA firms. If true, then there are one thousand individual IFAs who will shortly be looking to relocate their skills to a new firm. If you are an IFA, prepare yourself, clear the desks, put aside spare cash for the FSCS levy to increase dramatically and look to recruit new IFAs. These IFAs may come with strident opinions on what happened in Port Talbot.
If you are an IFA affected by British Steel, you could find yourself barred from joining another practice as your own practice unfolds under the weight of, in this particular case, “non-claims.†If your firm does fail and goes to FSCS it is unlikely that her directors will be approved again by the FCA in SMF roles. The FCA are looking to turn down any and all applications at the slightest excuse, and the BS brand may sink you. Whatever your role are in the IFA industry, you need to be making preparations now for the gathering storm.
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