PIMFA welcomes Financial Conduct Authority ban on Claims Management ‘phoenxing’

7 June 2022

PIMFA welcomes Financial Conduct Authority ban on Claims Management ‘phoenxing’

PIMFA, the trade association for the wealth management, investment services and the investment and financial advice industry, welcomes today’s announcement from the Financial Conduct Authority (FCA) that the practice of firms ‘phoenixing’ into claims management companies will be banned from 7 July 2022.

‘Phoenixing’ is a particularly unpleasant practice that sees claims management companies (CMC) created from the ashes of failed financial services firms and then target and handle the claims of their former clients to the Financial Services Compensation Scheme (FSCS) against the now failed firm. PIMFA has long argued that this practice should be stamped out.

Simon Harrington, Head of Public Affairs at PIMFA commented: “We are pleased the FCA has listened to PIMFA’s recommendations and intervened in this market and consider it to be long overdue. As we set out in our paper on FSCS reform, the existence of the FSCS can act as a market distortion especially in instances of firms seeking to phoenix as CMCs once they have defaulted onto the FSCS. Today’s policy statement represents a much-needed closure of this loophole and the FCA should be congratulated on taking action.”

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Notes for Editors

About PIMFA – the Personal Investment Management & Financial Advice Association

• PIMFA is the trade association for firms that provide wealth management, investment services and the investment and financial advice to everyone from individuals and families to charities, pension funds, trusts and companies.
• The sector currently looks after £1.65 trillion in private savings and investments and employs over 63,000 people.
• PIMFA represents both full and associate member firms. Full members provide a range of financial solutions including financial advice, portfolio management, as well as investment and execution services. They assist everyone from individuals and families to charities and pension funds, all the way to trusts and companies.  Associate members provide professional services to the PIMFA community.
• PIMFA  leads the debate on policy and regulatory recommendations to ensure that the UK remains a global centre of excellence in the wealth management, investment advice and financial planning arena. Our mission is to create an optimal operating environment so that its member firms can focus on delivering the best service to clients, providing responsible stewardship for their long-term savings and investments. 
• PIMFA has made numerous recommendations to the FCA regarding the Future of Advice, Future of Supervision and the FSCS levy – read more.
• PIMFA was created in 2017 as the outcome of a merger between the Association of Professional Financial Advisers (APFA) and the Wealth Management Association (WMA) with a history as a trade association since 1991 – read more.
• Further information can be found at pimfa.co.uk

Contact

For further information on this release or other press matters please contact:

Matthew West, PIMFA PR Manager – MatthewW@pimfa.co.uk, +44 (0)20 7382 0376

Sheena Gillett, PIMFA Communications & PR Director – sheenag@pimfa.co.uk, +44 (0)20 7011 9869 / +44 (0)7979 493225