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‘Advisers are trading without PI’

The FSA is failing to crack down on firms operating without professional indemnity insurance, leading to concerns that IFAs could slip through the net, says Collegiate managing director Tony Howe.

In 2003, the FSA adop-ted a sympathetic approach to IFAs struggling to obtain PI cover by granting waivers to firms. This ended in January this year with the onset of the Insurance Mediation Directive, requiring intermediaries to have 1m in PI coverBut Howe estimates that up to 40 IFAs could be trading without PI cover, leaving consumers unprotected and other IFAs to foot the bill through the Financial Services Compensation Scheme if a firm fails.

Howe says despite the availability of PI cover in today’s more benign market, some IFAs are not showing any urgency to get cover. He says: “Some IFAs are putting together presentations which do not put them in the most favourable light.

“It is now a matter of enforcement. I have seen little evidence that the FSA is acting quickly enough on this. At the very least, I would expect clients of IFAs without PI cover to be informed.”

But FSA spokesman Robin Gordon Walker says the regulator is not responsible for ensuring IFAs take out PI cover.

He says: “The onus is on IFAs to do the acquiring. If they are required to have PI insurance and do not have it then they are non-compliant.”


Getting into Teamspirit for charity

l Teamspirit managing director Jo Parker is raising money for Sight Savers International, a charity supp-orting the blind, by producing a book of short stories. The collection will be written by non-professional and never-before-published writers from a diverse range of backgrounds, including Parker herself. The book, which costs 5, will be published on May 5 […]

ABI is not backing compulsion for pensions

The headline and first para-graph of the article, ABI disappointment as Labour seems to rule out compulsion (Money Marketing, April 14), gives the misleading impression that the Association of British Insurers has undergone some sort of Damascene conversion and is now in favour of compulsion for individual pension savings.


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