As a frequent letter writer and contributor to our trade press on the
subject of PI Insurance,I must thank David Kenmir for providing so
much mis-guided comment which I can write about.
If it is only the bad IFAs which cannot get PI Insurance, I would
like to know which ones they are and how he intends making such a
judgement. The absence of compliant PI Insurance is industrywide.
Therefore, that cannot be the basis of measurement therefore.
The ability to “self-insure”in the absence of compliant PI insurance
will enable the IFA to argue successfully with the FSA for a
continuation of trading. Conversely, those without sufficient liquid
assets will not be able to. I have been clearly advised by the FSA
that that will be the basis on which I can continue to trade. If my
com-pany's liquid assets are insuff-icient according to a yardstick
which they have yet to dream up, am I considered a bad IFA?
As Sir Howard Davies has acknowledged publicly, the PI crisis is very
largely to do with the pension review and not to do with whether this
company is a good IFA or a bad IFA.
As liquid assets would be the basis for deciding who continues and
who does not, could we wonder where those liquid assets came from.
Could it be that the IFA concerned maximised commissions before the 1
per cent world took effect?
The other aspect of this which Kenmir has strenuously denied is the
suggestion that he wants to get rid of IFAs – particularly small
IFAs. It seems that the allegations were correct all along and
companies like mine cannot any longer look to the FSA to protect us
and thereby protect the valuable service which we are providing to
I agree with the LIA'sJohn Ellis. “I think it shows an astonishing
degree of complacency about the situation at a time when it is
extremely worrying.” Where did common sense go?
Director, Baxter & Lindley,