An insurance scheme to help IFAs facing the prospect of challenges from financial regulatory bodies has been launched by Justice in Financial Services.
The scheme from JIFS differs from PI insurance and is intended to complement, not replace, PI.
Unlike standard PI cover, the scheme provides support to the registered individual.
If an RI is charged with a disciplinary offence by the PIA or FSA, JIFS will act for them with the aim of negotiating a settlement. If no settlement is reached, it will rep- resent them at hearings.
Proceedings which would normally cost an individual about £6,000 can be reduced to around £3,000 for a JIFS scheme member.
Firms should still have PI insurance cover as the JIFS scheme does not cover cash payments, for example, if a firm is sued for misselling.
For a flat fee of £100 per RI, firms subscribing to JIFS literature and advisory service can join the JIFS insurance scheme. The literature service subscription is £250 and cost of the advisory service is between £500 and £2500 depending on the size of the firm.
JIFS director Joe Egerton says: “The scheme gives individuals the confidence they will not be abandoned if the regulator attacks their actions.”