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Lords ruling on liability puts IFAs in the frame

IFAs can be personally sued for advice after lea-ving a firm even though they gave the advice in the capacity of an employee following a House of Lords decision this week.

The judgment is not open to appeal and means that IFAs must face up to exposure to personal liability where any firms they have worked for do not have sufficient cover to meet all claims.

The Court of Appeal judge who made the original decision recomm-ended that advisers should take out personal run-off cover but IFAs say there is currently no such PI product on the market.

Despite the fact that the case concerned a surveyor previously employed by a now insolvent company who found himself personally liable for a mortgage valuation he had carried out seven years earlier, ind-ustry lawyers say the ruling applies to all employees who provide specialist advice, including IFAs.

The surveyor&#39s solicitor CMS Cameron McKenna senior assistant Martin Davis says: “Advi-sers should find out det-ails of their employer&#39s cover. But at present there is no PI product to cover this.”

Aifa director general Paul Smee says: “At first sight, this judgment does not seem reasonable. We will continue to work with other trade bodies on this and other judgments surr-ounding the area of liability for advice.”


FSA publishes stakeholder persistency monitoring

The FSA this week publishes its consultation paper on how accurate information on persistency rates for stakeholder pensions will be monitored. The move follows the acceptance by the regulator that existing methods of collecting and analysing persistency are not always appropriate to stakeholder schemes which are explicitly designed for policyholders to take payment holidays.

Price goes before a fall in scramble for distribution

IFAs are facing a tough dilemma as the scramble for distribution heats up and life offices start to approach firms with open cheque books. In last week&#39s Money Marketing, it was revealed that Clerical Medical representatives, at least at the level of broker consultants, have app-roached at least one national IFA and other smaller firms, […]

PIA revokes suspension of Gloucestershire IFA

The PIA has revoked the suspension of IFA Blenheim Financial Services of Bidmead, Cheltenham Road, Bisley, Stroud, Gloucestershire. The firm had been forced to cease conducting investment business regulated by the PIA because it had failed to renew its PI cover as required. It has now done so and satisfied the regulator&#39s rules. The PIA […]

Skandia offers multi-manager fund

Skandia has set up a new multi-manager fund bringing together the talents of Jupiter, SG Asset Management and Merrill Lynch Investment Managers. The UK dynamic fund is available through Skandia&#39s life and pension products and will be the third in its UK equity fund range alongside its UK index and UK equity funds. MLIM will […]

Tax avoidance (the fight goes on)

In recent times, we have witnessed high-profile celebrities and sports stars make the headlines for potential tax liabilities on ‘failed’ tax avoidance schemes. We are now used to reading about these individuals, but what about those who advise on such schemes? Read more


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