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PI in the sky as IFA&#39s premiums rocket by 650%

A Brighton IFA has been hit with a 650 per cent rise in its professional indemnity insurance despite having minimal exposure to potential endowment or split-cap misselling claims.

SR Financial Management submitted a PI renewal form to insurer St Paul several weeks ago, expecting to receive a quote roughly comparable to the £5,040 it paid for £1m worth of cover with the same company last year.

But it was stunned at the end of September to find that St Paul was demanding £38,235 to renew its insurance, with a policy excess 15 times higher than the £1,000 it was previously subject to.

SR director of development Tony Travis says he rang the underwriter to query the premium and was informed SR was only offered reinsurance because it is low-risk, with little or no exposure to split-caps, structured products and drawdown.

He says: “St Paul said we were lucky to get insured at all but it is nothing short of extortion. Some IFAs cannot pay these premiums and will throw their hands up and quit the industry. I find it totally mind-blowing.”

St Paul marketing manager Peter Elliott says: “The misselling issues just are not going away. The pre-miums of many pay for the losses of a few.”

•Have you have had a PI nightmare? Tell Money Marketing&#39s Rebecca Barr about it on 0207 943 8043

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