PIMFA welcomes FCA plans to stop Claims Management Companies from 'Phoenixing'
PIMFA, the trade association for wealth management, investment services and the investment and financial advice industry, has welcomed proposals from the Financial Conduct Authority (FCA) that would ban claims management companies from managing Financial Services Compensation Scheme (FSCS) claims where they have a relevant connection to the claim; a practice known as 'phoenixing'.
PIMFA has called for the practice of phoenixing to be banned for some time, not least in our policy paperpublished late last year.
Simon Harrington, Senior Policy Adviser at PIMFA, comments: “This is an extremely welcome intervention from the FCA. As we set out in our paper on FSCS reform last year, it is of the utmost importance that the ways in which firms are able to transfer risk onto the FSCS and exploit for their own potential gain should be reviewed.
“This consultation and, we hope, the forthcoming policy statement, is a significant step in addressing this market distortion. While it is step in a much longer journey towards lower levies, it is still extremely welcome and a credit to the FCA that they have listened.”