View more on these topics

DB transfer exposure can nearly double adviser PI, broker finds

Business-Growth-Drawing-Chart-Performance-700x450.jpgAdvisers giving defined benefit pension transfer advice can expect to pay nearly double for their professional indemnity insurance premiums at the next renewal than those who do not advise in that area.

QPI, which is part of insurance broker PIB Group, says advisers with DB exposure can expect to pay between 2 per cent and 3 per cent of their turnover for their PI premiums at the next renewal.

For advisers with no DB exposure the average rate is likely to be between 1.7 per cent and 1.8 per cent.

Last month, Money Marketing reported advisers’ experiences of insurers continuing to take a sceptical view of any DB transfer business amid a slew of negative headlines around British Steel and other well-documented DB scheme failures.

PI pressure: Three advisers reflect on the deals their firms struck

Some advisers said they can no longer get run-off cover for past business, in addition to limited options for forward-looking business.

According to QPI, in the past year three PI insurers have exited the market.

QPI development executive Hayley Dawson says: “Insurers are looking very closely at those firms that have had a significant increase in DB work over the last couple of years, especially where this is disproportionate in relation to their overall turnover.”

She adds: “We’re witnessing a substantial hike in premiums. We’ve seen doubling and, in some cases, tripling in the amount IFAs were paying the previous year. We’ve recently seen one firm whose premium rose from £16,000 to £70,000.”



Gregg McClymont: What Australia’s pension scandals can teach us

Australia’s defined contribution pension arrangement (known to Aussies as “super”) is the largest in the world, with assets of A$2.6trn – 144 per cent of GDP. Not bad for a system built from scratch in the early 1990s via mandatory employer contributions. Those involved in delivering auto-enrolment here in the UK always saw super as […]


Five questions to ask if your client’s Sipp provider is bought

Consolidation in the Sipp market continues, with the rate only likely to increase. This means that, sooner or later, an adviser will more than likely have a client whose Sipp operator is acquired. What five things should you be thinking about? 1. Why was the Sipp provider acquired? Quite simply, is this a commercial acquisition […]


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. At the first sign of claims increasing you may well see PI insurers fleeing for the hills and not providing cover at any price. Not good for clients, advisers or regulators.

    Let’s hope the FCA are doing some contingency planning. They may also find themselves in a Catch-22 situation because raising too many concerns may just start an avalanche…

Leave a comment


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