View more on these topics

More realism on PI and premiums

I read the recent article, Angry IFAs throw PI in FSA&#39s face, with interest.

One aspect not covered, which could have the effect of dramatically reducing premiums for many IFAs, is the level of cover demanded by the regulator.

We are a medium-sized IFA, with 20 advisers, operating in the South-west of England.

Our business is made up of mainly smaller cases – last year, for example, we did 1,567 transactions. Because of the level of our turnover, we are obliged to take cover for £3m for any one claim (or aggregate basis). It is on this level of risk the premium is calculated.

We estimate that, due to our type of business, the maximum individual claim we are ever likely to experience would be in the region of £100,000.

We did minimal business in the contentious areas, such as pension transfers, FSAVCs, endowments, yet we are forced to pay the extortionate ever-increasing premiums inflicted on us by the underwriters who seem to have little perception of the real risk. In this regard, I agree whole-heartedly with the comments of the other industry contributors in the article.

There are many other IFAs around the country in our position, who do not enjoy the higher-quality business experienced in London and some other financial centres, where undoubtedly the level of prospective claims would be considerably higher.

With all the other changes facing our industry, a more realistic approach to PI and premium levels is required.

Geoff Carter

Compliance officer

Langtons IFA,

Tiverton, Devon

Recommended

Contracting-out choice shifts from pivotal age

Product providers are moving away from using pivotal ages for contracting-out decisions, believing all policyholders should review their position in light of the new second state pension and lower investment returns.Axa says men aged 56 and women aged 49 should be contracted in but believes people should hold off from making a decision as the […]

Village people see home values rise

One-third of first-time buyers would have reconsidered the location of their home if they had been given more information before they moved in, according to research from Virgin One.Its Cappuccino Test report questioned homeowners and estate agents on what makes an area up and coming, how they spot prosperous areas and the top turn-offs of […]

NDF Administration – Higher Income and Growth Plan 2

Monday, March 18, 2002Type: Guaranteed equity bondAim: Income and growth by investing in the top 10 FTSE 100companiesMinimum-maximum investment: £10,000, £7,000 for Isa investmentsand Pep transfers-£1m, £7,000 for Isa investmentsTerm: Five yearsGuarantee: Capital returned in full provided none of the stocks aremore than 20% below their initial levelReturn: Choice of 0.7% a month, 9% a […]

ScotProv guide to mortgage protection

Protection specialist Scottish Provident is publishing a free consumer guide on mortgage protection and the best way to protect the different types of loans available on the market.The guide has been produced following a survey commissioned by Scot Prov which found that 27 per cent of borrowers either have no mortgage protection or are unaware […]

Identifying best-in-class UK stocks — Mark Martin, Neptune UK Opportunities Fund

FE Alpha Manager Mark Martin assumed management of the multi-cap UK Opportunities Fund at the beginning of February. As manager of the highly regarded UK Mid Cap Fund, Martin has begun restructuring the new portfolio to focus on our very best UK stock ideas from across the FTSE All-Share Index. In this video, update Martin addresses:

– Themes informing the UK Opportunities Fund
– The multi-cap structure of the fund
– UK equity valuations

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment