Cases are currently paid for by financial businesses when more than three complaints are referred to the ombudsman.
The increase of free cases means that only 1% of businesses will have to pay any case fees at all.
The ombudsman also proposed to freeze both the case fee at £500 and the industry levy.
Stephen Gay, director general of AIFA, said: “We have persistently pressed for a better deal for advisers, who represent a very small percentage of the FOS caseload. We are therefore pleased that the ombudsman has recognised this and delivered a material benefit for IFA firms.
“We have been in discussion with FOS about the increase to the free case limit, which will now mean, in effect, that all but the largest IFA firms will not have to pay for cases referred to the ombudsman.”
Currently one in four firms are levied a charge due to cases being referred to the ombudsman.
Gay added: “We need a fair and balanced dispute resolution service that works for both consumers and the financial services industry. At present the costs are not distributed proportionately across the industry. This is an important move to redress the balance.”
