Thousands of IFAs may face suspension by the PIA over PI cover as new
research reveals 75 per cent face difficulties obtaining compliant
The regulator has accused IFAs of having “given up the ghost” and of “not
bothering to get PI cover or giving up too easily”.
Spokeswoman Sarah Modlock says: “Some are not letting us know they are not
covered and are carrying on regardless.”
The regulator says the problem has arisen despite it relaxing the rules
governing PI cover in October. The PIA is aware of cases of IFAs continuing
to do business without cover but will not divulge numbers and openly says
offenders will be suspended. The warning comes as the ABI life offices
group-funded Pension Advisers Support System has set up a PI emergency
It has vetted and set up a panel of brokers to identify insurance cover
suitable for IFAs and a panel of solicitors experienced in dealing with PI
insurers and IFAs.
IFAs registered with Pass will be able to contact the Pass helpdesk as the
first port of call.
Pass has made the move on the back of independent research showing that up
to 75 per cent of IFAs are suffering PI problems.
Pass commissioned Opinion Research Corporation to probe more than 450
IFAs' experience of the pension review. Three-quarters said although they
had PI cover, they were worried about renewals. Others were carrying
non-compliant cover because of increasing excesses.
The research also says some IFAs were finding cases arising under phase
two were excluded from policies.
The helpdesk will assess individual IFAs' problems and suggest a member of
the panel who may be able to help.
PI brokers claim the problem is improving and IFAs should contact quality
brokers with a good knowledge of the market.
Society of Financial Advisers chairman and IFA Robert Reid says: “This
started as a small problem but has ballooned because of the cost and
excesses which have risen to the level where there is effectively no cover