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IFA mistakes may lead to 48,000 in compensation, says FSCS

Consumers can claim compensation of up to 48,000 if they have lost money as a result of their dealings with any one of 24 firms that the Financial Services Compensation Scheme has recently declared in default.

Declaring a firm in default is the final part of a process whereby a regulated firm, like a financial adviser, has been found by FSCS to be unable to pay claims.
This means that customers who have lost money as a result of dealings with one of these firms can make a claim for compensation to FSCS.

The kinds of investment claims FSCS handles usually relate to advice. If somebody has been advised to buy an investment product such as an endowment policy, but it was unsuitable for them and they have lost money as a result of the advice they received.

FSCS can also pay compensation for financial loss arising from negligent investment management and fraud, or if an authorised investment firm stops trading and cannot return its customers’ investments or money.

Loretta Minghella, chief executive of the FSCS, says: FSCS helps protect consumers against financial loss when the firm they dealt with has ceased trading and is unable to pay claims against it. It is important that we let consumers know that FSCS may be able to help if they have lost money and the firm can’t pay.

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