As the professional indemnity insurance crisis stumbles on, I think
it is important that the IFA community is made aware of the following.
The FSA has confirmed to me that, over the last five months, 41 per
cent of IFAs have still failed to achieve PI insurance of any nature.
Even worse, of the 59 per cent that have managed to achieve PI
insurance in the last five months, the FSA has confirmed that the
majority of cover is non-compliant.
Furthermore, of the tiny minority that have achieved compliant PI
cover over that period, in most cases, their premiums have increased
by more than 200 per cent (that is, have more than trebled).
When asked to comment on these figures, a director of FSA wrote to me
confirming that the statistics are correct but he then amazingly
concluded that: “The statistics suggest that the overwhelming
majority of IFAs are able to get PI cover.”
I am a businessman who accepts and welcomes regulation in his sphere
and who has created a small business despite the last 13 years of
continuous regulatory turmoil.
We are not a large company but we do now employ 12 people and, like
all IFAs, we fund and pay the regulator's salaries, pensions and
However, I am at a total loss as to how any IFA should respond to a
regulator who can produce these statistics and then come to such an
I am also uncertain of what my response should be when a director of
FSA has the ingratitude and disrespect to suggest that I might like
to get PI cover by seeking a PI waiver (from the FSA), join a
network, or merge with another firm that has such cover.