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FSA must take action on PI

The professional indemnity crisis is becoming a very real threat to many IFA businesses.

Nearly all are facing huge increases, in many cases, up to double or three times normal premiums and, in one exceptional case, up to 750 per cent more than last year.

Others are finding it virtually impossible to access compliant cover, often through no fault of their own but simply as a result of the constricting market, with just a handful of PI insurers willing to take on the perceived risky business of an IFA.

Throughout this crisis, the FSA has remained steadfast in its resolve to enforce regulations that all firms have compliant cover.

Only recently does it appear to be taking a softer line, asking Aifa to survey its members to gauge the extent of the problem.

The regulator says it is willing to take into consideration factors such as capital adequacy as a means of offsetting PI insurance but are such moves too little too late for many IFA firms? Many do not have the spare capital lying around, hence the problem of paying for PI.

It is time for the FSA to take action and discuss the issue with the industry and come up with a viable alternative to help protect smaller firms.

Money Marketing is asking readers to tell us about their PI nightmare stories to create a body of evidence to put to the regulator.

This week, MM is also launching the Sandler Forum examining the implications on the market of the imposition of Sandler&#39s suite of stakeholder products.

The forum aims to discuss the pros and cons of the products, courting the views of the industry and all interested parties.

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