View more on these topics

Innocent majority take blame for the bad risks

Interesting though it was to read the recent article, Network dilemma, it was equally disheartening to hear so much evidence of this latest professional indemnity insurance pressure on IFAs to “jump on board and let the network take care of all your problems”.

Indeed, they can, and do so, but it does seem that this is fast moving us back to the bad old days and the perception that not only was a network a good place to learn the skills of independence but also a convenient place to”lie low” for a while.

Of course, the simple mathematics of joining a network are no different from any other insurance – Share the burden of your risk with others.

The one serious flaw in this idea is the question of whom you share business risks with. And the further question of how much trust you can place in the skills and motives of the central agency dealing with those risks.

The break-even point comes when you realise that you are unfairly subsidising not only the PI sins and misdemeanours of “the few” but that there are also other costs, less obvious, besides.

We all know that the ever spiralling costs of motor insurance result primarily from the uninsurable minority, who do not bother to take out insurance. Or, put another way, with those who are such bad risks that they ought not to be allowed out on the road at all.

The bottom line is that, eventually as ever, the innocent majority end up bearing an unfair portion of the expense, and perhaps even reputation, for such blanket facilities.

Your own columns bear frequent testimony to widespread anger among appointed representatives at a number of such “service” providers whose greatest efficiency seems to be in recouping their costs in the PI field.

One presumes that these calculations and those for similar services are mathematically fair but doubt will ever remain over their fairness to the majority.

E John Hamp

Support Services Group,

Corfe Mullen,Dorset

Recommended

Lloyd George looks to developing economies

Lloyd George Management has established the LG emerging markets fund, an Oeic that invests in developing economies.The fund aims for capital growth by investing in 40 stocks across Eastern Europe, Africa, the Middle East, Latin America and the Asia Pacific region. It was created because the company thinks emerging market economies are growing at a […]

Tax reliefs and tax free cash

The Chancellor&#39s statements in his speech: “I can confirm that the tax free lump sum payment to retirees will remain”; and “Existing tax reliefs for pension contributions for employees, the self-employed and employers will also remain” are much to be welcomed. They put an end to much speculation concerning the abolition and/or restriction of these […]

Employee share schemes

The Government has confirmed that the corporation tax deduction for employee share schemes will be put on a statutory basis for accounting periods starting on or after 1 January 2003. Up to now tax deductions could be obtained on a statutory or case-law basis. The new statutory deduction will be available for employee share schemes […]

Impact on financial products

First let&#39s consider the proposals that could have a direct impact on the attraction or otherwise of financial products. The key proposed changes in this context are – the abolition of the indexation allowance– taxation of capital gains on a year by year basis (pre realisation). Perhaps the greatest concern here is the Revenue&#39s expressed […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    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