Open letter to Aifa director general Paul Smee
My company has a clean 15-year record, with no claims and virtually no pension review cases or endowments, etc.
Despite this, my PI premium has just gone up at renewal from £8,000 to over £20,000. The excess per claim has climbed from £1,000 to £7,500, with £15,000 for many types of business.
We are told that only four insurers in the whole market will now quote for IFAs and no one wants our business due to the history of the PIA inviting claims (for example, the absurd R U Owed envelopes).
I cannot blame the professional indemnity insurers, except they should have stood firm against the PIA and said they would not have covered claims arising from invitations.
The other day, a partner at a national firm of accountants told me that their own ex-in-house financial adviser had just been awarded £30,000 compensation for wrongly advising himself to move his paid-up final-salary benefits to a personal pension. The accountants were fuming, particularly as he had 100 per cent of the commission credited to him. I have often heard similar stories. At this rate, professional indemnity insurance will soon be unav-ailable or unaffordable for IFAs. What are Aifa and our regul-ators doing about it?
My compliance officer wrote to the FSA weeks ago when we thought we might not even be able to get cover. We have had no reply to date.
Langtons, Tiverton, Devon