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Non-compliant advisers win rule relaxation

IFAs with non-compliant PI cover will no longer have to tell their clients after the FSA relented to pressure from Aifa and advisers.

The change is effective from this week and means that IFAs unable to find cover or given permission by the FSA not to have compliant PI cover will no longer have to write to clients.

Aifa has been fighting for the change for some time, saying the only result of the rule has been a weakening of clients&#39 trust in their adviser. It says that PI is not indicative of an IFA&#39s ability but consumers could misinterpret the information.

FSA spokeswoman Louise Buckley says: “With immediate effect, firms will not have to disclose to clients that they have received individual guidance over PI. We have decided to drop that requirement after listening to the concerns of the industry.”

Aifa director general Paul Smee says: “I am delighted. The rule was inappropriate because PI is to do with financial strength, not competence of an adviser. I think it will make a difference to firms struggling in the current climate.”

The FSA says since September 2002 around 600 firms have been operating with non-compliant cover.


Keydata Investment Services – Extra Income Plan Issue 4

Tuesday, 1 April 2003 Type: Guaranteed equity bond Aim: Income or growth linked to the performance of the FTSE 100 index Minimum-maximum investment: £7,000-no maximum Term: Five years Guarantee: Capital returned in full provided the index does not fall by more than 40% and returns to at least its initial level Return: Option 1 &#45 […]

Captive audience

Let us start by stating the obvious – the PI crisis is the single most important issue the industry presently faces. That said, it is easy to forget that IFAs are not alone in experiencing massive professional indemnity insurance increases. This is a widespread problem.After accounting scandals such as Enron and Equitable Life, accountants saw […]

Claims collapse against Temple

Seven former RJ Temple consultants have lost their claims against the national IFA for unfair dismissal.The first case was brought by former senior managers Philip Gerry, Andrew Cole, Alan Hemsworth and Barry Martin-Pitt, now directors at IFA Westpoint Financial, which has six reg- istered individuals.They alleged unfair and constructive dismissal, unlawful deduction of commission, underpayment […]

IMA in tax plea as fund sales suffer

Net retail sales of investment funds in February plummeted by almost £500m from the same time last year, according to the Investment Management Association.The IMA&#39s monthly statistics reveal that retail sales slid to £194m in February, down from £222.5m in January and £670m in February 2002. At £193m, Isa sales were also down on last […]

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Absence management systems gone AWOL from UK’s SMEs, reports Jelf

A quarter (23 per cent)* of the UK’s small to medium-sized enterprises (SMEs) do not have an absence management system in place, according to new research from Jelf Employee Benefits. Despite 69 per cent* of organisations having a system in place, three-quarters (75 per cent) report that it is not providing them with sufficiently empowering absence or health data to inform an effective wellbeing programme.


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