View more on these topics

&#39Some firms better off without PI cover&#39

Unprecedented professional indemnity insurance premium increases and confusing messages from the FSA have led IFAs to claim they are better off being denied PI cover.

Several IFAs say they have been told by the FSA that it is acceptable to carry on trading without cover. They say they are better off without PI that bears excesses so high that they would rarely be able to claim.

But other IFAs say the FSA is giving contradictory advice, saying they have been told they have a grace period of one month, after which they must close down within a week.

Financial Management Group partner Chris Mellor says: “We were uninsured for six weeks in July and August. When I first rang the FSA to tell them we were no longer covered, they said that as long as we kept making eff-orts to get cover we could trade on a day-to-day basis as long as we kept them inf-ormed, which we did.

“It seems a strange statement to say IFAs would be better off without cover but I can understand the logic behind it. The excesses are so high that you cannot ever see them paying out but there is still the situation where you may get an £80,000 claim so we still have to have it.”

Recommended

Chelsea Building Society – Guaranteed Bond (Issue 4)

Friday, 1 November 2002 Type: High interest account Minimum-maximum investment: £2,500-£500,000 Interest rates: 4.25 per cent gross a year Term: Until May 6, 2004 Offer period: Until further notice Withdrawal penalties: 75 days&#39 loss of interest Tel: 0800 429429

&#39Use compensation scheme to self-insure advisers&#39

The FSA should reform professional indemnity insurance so that the Financial Services Compensation Scheme provides cover for advisers, an IFA argues in a letter to FSA chairman Howard Davies.In the letter, which marks the first responses to Money Marketing&#39s call for firm FSA action over the growing PI crisis, Langtons IFA managing director Colin Langton […]

IMA holds two-day seminar on investment

The Investment Management Association is holding a two-day conference on the issues facing the investment industry at the Cafe Royal in London on November 4 and 5.The conference will be split between institutional and retail asset management and will include topics such as the creation of a single European market in financial services and the […]

Verity&#39s View

IFAs rarely have a reason to feel good about whichever scandal happens to be the latest to engulf the financial services industry.There may be some satisfaction in watching firms that have succeeded only by stepping over regulatory boundaries getting their comeuppance. But whatever pleasure there might be in that is inevitably cancelled out by higher […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment