Two failed advice firms have been declared in default by the FSCS, opening the door to compensation claims.

Five firms have been declared in default so far in December by the FSCS, including four advice firms.

A+ Financial Services Limited (FRN 222159) (trading as A-plus Independent Financial Advice, Grosvenor Trust & Saving and A-plus) was declared in default last week by the FSCS after the compensation body said it had received 10 claims against the firm to date, all for investment advice.

The FSCS has also received two claims, both for pension transfer advice, against a second firm, Premier Wealth Management Harrogate Ltd (FRN 752619) which was also declared in default last week by the FSCS. Neither of the claims against Premier Wealth Management is BSPS related.

The Financial Services Compensation Scheme declared 10 regulated firms had defaulted in October and November, many of them failed advice firms. The defaulted firms included Ridgeway Consultants, EQ Financial Planning, Juno Moneta Wealth, Oracle Consultants, Solutions Financial Services and Tudor Court Financial Planning.

Last week the FCA announced a review of Financial Services Compensation Scheme limits and funding class thresholds in a plan to improve the compensation framework.

The regulator has been reviewing the framework for protection provided by the FSCS following concerns about spiralling costs.

Following an industry consultation, the FCA is now starting work to review compensation limits to consider whether they are appropriate for different types of claims. It is also reviewing funding class thresholds to consider whether the class thresholds remain at an appropriate level.

The regulator will also carry out consumer and firm research in conjunction with the FSCS, to improve its understanding of the impact of FSCS protection on consumer decision making, confidence and behaviour and on firm behaviours and incentives.