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IFAs back PI mutual but don&#39t want set-up costs

Most IFAs support industrywide mutuals providing professional indemnity insurance even if premiums were no cheaper than those currently available, says an FSA survey.

But although 59 per cent say they would support a mutual scheme, 47 per cent would not be willing to contribute to set-up costs and 69 per cent say they would not join if there was a risk they would have to foot the bill if things went wrong.

Eighty-three per cent say the problems in the PI market are systemic ones which need radical action, with 57 per cent believing insurers and underwriters are looking to quit the market.

Forty-four per cent of IFAs say their PI premiums more than doubled the last time that they renewed cover and 77 per cent said they have not had a non-pension review claim against them in the last three years.

The findings are part of a survey of IFAs attending the FSA&#39s IFA PI roadshows during February and March. In total, 308 of the 395 attendees who answered the surveys at the roadshows were IFAs.

Helmgodfrey managing director Bruce Wilson says: “IFAs are so desperate to get cover that they would turn to a mutual as a means of last resort. But we are in the financial advising business, not the insurance business, which we would be if we joined a mutual insurer.”

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