View more on these topics

Concern as network fails to secure PI

Accounts-Paperwork-Financial-Corporate-Business-700x450.jpg

Kent-based network Virtual Net Europe has been unable to secure professional indemnity insurance, raising concerns about its future.

A senior spokesman at the firm has confirmed the network has been unable to secure PII and says members have been alerted to the problems.

He says the firm is in talks with the Financial Conduct Authority. 

Money Marketing understands some members have been unable to trade since Sunday. According to the FCA register, the network has 11 member firms.

The business made a £182,532 loss in the 12 months to 31 March 2012, according to the latest accounts filed with Companies House. This followed a £303,566 loss in 2010/11.

The firm also operates VN Direct, a support services offering for directly authorised advisers.

Virtual Net Europe declined to comment further.

Recommended

1

Pensions regulator considers ‘watch list’ in liberation clamp-down

The Pensions Regulator is considering introducing a pension liberation “watch list” as part of a clamp-down on fraudulent schemes. TPR is part of a task force comprising the Government, police and other agencies attempting to tackle the rise in the number of people accessing their pension before age 55 using a liberation scheme. A number […]

Out of Context

“He does the work of six people for the pay of one.” Standard Life managing director of adviser and investments Richard Charnock hands head of platform propositions David Tiller the perfect excuse to ask for a pay rise. “It is safe to say I entered the industry before you were born.” Lighthouse Group chief executive […]

1

Gold drops below $1,200 in worst quarter since 1968

The price of gold dropped to its lowest since August 2010 in overnight trading as the yellow metal looks set to post its worst quarter since at least 1968. Gold fell to $1,191.21 an ounce in Asian trade before recovering as investors continue to assess the impact of the Federal Reserve’s eventual move to reduce […]

PRA demands UK banks find further £13bn in capital

The Prudential Regulation Authority has told UK banks to find another £13bn of capital in addition to the money already raised to strengthen their balance sheets. The PRA’s latest report says there was a £27bn shortfall in the capital requirements of Royal Bank of Scotland, Lloyds Banking Group, Barclays, the Co-operative Bank and the Nationwide […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 11 comments at the moment, we would love to hear your opinion too.

  1. Thin end of the wedge me thinks?

  2. As an ex-AR sorry to hear this.

    Some good people in their head office but their AR numbers have been shrinking for years. Saw this with Eurosure 10 years ago, same thing and then VN rescued their ARs.

    Going DA means you know your own fate with PI.

  3. Julian Stevens 26th June 2013 at 9:52 am

    It would be interesting to know the reasons why not a single PI insurer is prepared to offers terms for this particular network. Is it potential claims exposure? Perceived lack of adequate systems and controls? Perceived lack of quality amongst the 11 member firms? The types of business being transacted? Claims history? Weak financial position? Negative compliance reports from the regulator?

    It could be a whole host of things or maybe just one glaringly adverse risk factor that’s prompted everyone approached to to say Sorry, nooo waaay, try elsewhere..

  4. Its a shame when any business struggles like this but it certainly will not be the last. Join a Network with the size and finances to offer security or go direct – I don’t see any other viable option. Hope the advisers find new homes soon, tough times

  5. Steve Young (Sense Network) 26th June 2013 at 10:22 am

    Please don’t tar all networks with the same brush. In the last year, Sense has grown by over 40% and has had no problem in securing PII at enhanced rates.

    Over the years, both networks and DA firms have failed as a result of not managing their risks. If Virtual Net do fail, it will be as a result of what they and their members have done rather than an indictment of the concept that communities of advisers can work together for mutual benefit.

  6. Money Marketing need to check that they have the correct facts before posting an article.

    Is it just me that thinks this?

  7. @hugh jeego

    Any evidence for that assertion or just schadenfreude from an anonymous commenter?

  8. David Carrington (Personal Touch) 26th June 2013 at 11:19 am

    It appears that increasingly the PI market is looking for reassurance that all advice firms have robust processes in place to deliver good customer outcomes through the delivery of quality advice and appropriate products.

    At Personal Touch we have recently renewed our PI cover on competitive terms in a tough market. PI is a great example of where a quality network can add value for their member firms and give peace of mind and a stable environment for growth.

  9. One of the problems is that the network remains liable for the adivce of its pasts members and its current members bear that cost.

    The likelihood of a claim arising in the same year as a policy is written is very slim so the bulk of the premium goes towards the costs of previous advisers. As time goes on, this becomes a bigger and bigger liability.

    Where the membership numbers dwindle, then the exisitng advisers just can’t meet the cost.

    This is not the first and will certainly not be the last.

  10. Actually, the report is inaccurate.

    As someone who knows what is going on, VNE has not failed to secure PII. As a matter of fact VNE has been making an orderly plan for sometime to concentrate on its direct services offering. I do applaud their strategic courage as the risks of running a network business is grossly disproportionate to the rewards. I know another network has boasted “growing by 40% in the past year” which is fair and good but let’s see what they say 3 – 5 years form now when the long arms of the regulator and other sector related consipracies catch up on them.

  11. RegulatorSaurusRex 27th June 2013 at 12:02 pm

    Networks don’t make any Sense, they are a flawed concept based upon what some believe is the anti competitive and therefore unlawful AR Regulations.

    Networks are high risk due to poor systems and controls put in place by people who fail time and again yet move on to do the same in a ‘join my gang while it lasts’ sales pitch.

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com