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Pension doyen Bamford fails to get PI cover

The PI crisis could prevent one of the UK&#39s most high-profile and

respected IFAs from continuing in business independently, with Sofa

chairman and Informed Choice managing director Nick Bamford admitting

this week that he has failed to get cover.

Bamford says he may have to merge with a bigger firm, despite there

having been no claims made against his firm in its eight years of

trading.

He is the most high-profile small IFA to fail to get cover in a PI

market which the FSA says has only two active insurers.

Bamford has been trading without cover since last Thursday and says

he will soon have to stop giving advice if he cannot get cover. He

says his other options are to tie to a bigger IFA or break up his

firm and become an appointed representative.

The FSA says firms with turnovers of less than £10m will have to

obtain non-compliant cover before it will consider whether they can

continue to trade.

It will then consider a firm&#39s financial position, the nature of its

cover, its PI claims&#39 record and its past business mix before

allowing such cover.

Bamford says: “There is a serious possibility that we will have to

stop giving advice and just service our clients if this is not

resolved. We have far better capital adequacy than 10 per cent of

turnover but that money is not there for paying compensation.”

An FSA spokesman says: “We look at each case on its own when

considering whether to allow a waiver.”

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