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Pavis offers IFAs holding service in face of PI crisis

IFA Pavis Financial Systems is offering a holding service to IFAs who face closure through lack of professional indemnity insurance or who want to retire but feel now is a bad time to sell up.

The service allows IFAs who have to stop trading but do not want to sell their business to keep in contact with their clients and earn commission.

Under the scheme, IFAs cease to be regulated and license their clients to Pavis which will then pay the IFA 70 per cent of all renewal commissions and 30 per cent of initial commission of any new business transacted by Pavis advisers.

Advisers can get their clients back on three months notice.

Liverpool-based Pavis, which has six RIs, anticipates that advisers may want their client bank back if the PI market relaxes or the market for selling firms improves.

One of Pavis&#39s first clients is an IFA unable to get PI cover and forced to close after trading for 28 years.

Pavis managing director Bob Newton says: “This is the perfect structure for those advisers under pressure with regulation and PI to either retire or temporarily deregulate while keeping the client base and income intact.

“After an adviser has built up a relationship over years, the worst thing that he can do is just say goodbye to those clients.

“IFAs can keep in contact with their clients and tell them to come to us when they need compliant advice.”

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