APFA urged the regulator to reconsider its position on the longstop and investigate the alternative options that were "not properly considered" in the Financial Advice Market Review.

Some 85% of advisers who responded to APFA’s recent Cost of Regulation Survey stated that lack of a longstop created concerns for their personal finances when planning retirement.

A quarter indicated that they were likely to defer their time of retirement in order to pay PI insurance.

Whilst a 15 year longstop remains APFA’s priority, the recent survey showed that around half (45%) of advisers were open to the socialisation of costs, by the creation of a compensation fund, as an option to explore.

APFA believes that the introduction of a fair limit to liability is necessary to bring peace of mind to advisers in retirement, whilst also resulting in more investment and growth in the advice sector and better access to financial advice for consumers.

Chris Hannant, APFA’s director general, said: “Lack of a longstop is a clear concern for financial advisers who operate as sole traders or in partnerships as they potentially face unlimited liability long after they have ceased trading and into retirement. The stress that can be caused to advisers who may be long-retired and often of advanced years, with awards which can be made of up to £150,000, cannot be under-estimated.

“Our survey results show that this is a real concern for advisers and an unnecessarily harsh burden to place on individuals and their families. More consideration needs to be given to a fair hearing in such situations.”

He said: “We still believe that a 15 year longstop is the fairest solution. FAMR, however, did not properly address the issue or give consideration to the alternative options set out in its Call for Input. These issues now need to be fully investigated.”