Advisers have applauded Tenet’s move to offer permanent run-off professional indemnity insurance for retiring network members, saying it offers peace of mind in the absense of a longstop.
The firm announced the deal last week. The cover, which will be provided by Tenet’s Guernsey-based subsidiary Paragon Insurance, is aimed at advisers who are planning to retire or sell their business. It will be available from October.
The cover will see departing advisers pay a lump sum premium equivalent to two years’ PII premiums in return for guaranteed indefinite cover.
It will also be available to former Tenet advisers and will cover any advice written while a Tenet member. Tenet is in talks to secure similar arrangements for its directly authorised firms.
Permanent run-off cover has become increasingly difficult for IFAs to secure in recent years, with the few policies on offer often prohibitively expensive.
Tenet distribution and development director Keith Richards says: “This deal makes it an eminently affordable alternative to renewing every 12 months and will provide complete peace of mind for the future, given that advisers are not protected by a longstop afforded to other professions.”
Direct Financial Planning IFA and Tenet member Phil Cross says: “Any move in the direction of run-off cover has to be welcomed and I think this is a really positive move by Tenet, which will give departing advisers peace of mind. I think the ultimate aim for everyone in the industry is to have a longstop introduced.”
PMI Independent Financial Advisers director John Stewart says: “This is a really good option for Tenet advisers. It offers real peace of mind given you can retire and not wory about the absence of a long stop.”
Chapters Financial IFA Simon Hewitt says: “This seems like a really unique offer and one that Tenet advisers should be very pleased about. For the advisers leaving the industry because of the RDR, it will be good to have some peace of mind with regards to claims liabilities.”