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Concern as network fails to secure PI


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.



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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.

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