View more on these topics

Registration could lead to fines for retiring IFAs

Retiring IFAs could be bankrupted by fines up to 30 months after they leave the industry following the introduction of individual registration rules.

The PIA has imposed the 30-month rule because it says most misselling cases come to light after an independent adviser has left a firm.

The problem will be made worse by professional indemnity insurers refusing to cover individuals fined by the PIA.

Insurers claim that it would be wrong to give cover for fines covering rule breaches.

As a result, retired independent advisers will have no insurance cover and no business capital to pay a fine.

The IFA Association is seeking an urgent meeting with the PIA over the issue.

Individual registration will be introduced in October. It will allow the PIA to fine brokers for compliance failures. Company directors of big IFAs and life offices will be individually registered from May.

IFAA chief executive Garry Heath says: "This could cause a real problem for retiring IFAs. We are very keen to talk to the PIA about this to find out what they intend."

Riach Independent Financial Advisers proprietor Bob Weir says: "It is frightening. It is justified if there has been a case of blatant misselling but for things like the pension review, where they changed the goalposts, it is unfair."

Houghton Associates managing director Alex Houghton says: "It could badly affect your retirement capital."

PI insurer LIBM has announced substantial supplementary calls for 500 IFA members of its scheme from 1992/ 93 to 1996/97. The calls range from an extra 20 per cent for 1992/93 to 75 per cent in 1996/97. LIBM blames an "extraordinarily high" number of claims, mainly due to the pension review. It is planning to let members make payments in instalments.

Recommended

IBRC in late bid to avoid ICS levy

Over 4,000 IFAs regulated by the Insurance Brokers Registration Council are set to contribute to the Investors&#39 Compensation Scheme for the first time. The Financial Services Authority is to include IFAs registered by recognised professional bodies such as the IBRC when it creates a super-compensation scheme next year. Under the current rules, the 4,142 individual […]

Midshires consults over rival takeover bids

Birmingham Midshires Building Society is seeking permission from Royal Bank of Scotland to enter into talks with rival bidder Halifax over a possible acquisition. Midshires is also seeking advice from its banking and legal advisers about how to go ahead with its conversion, faced with the two rival bids. It is understood that the Building […]

Liddell in warning to small firms on review

Treasury economic secretary Helen Liddell has turned her wrath on smaller IFAs which fail to progress sufficiently with the pension review. Speaking in the House of Commons last week, Liddell criticised IFAs over their conduct of the review and warned that they must step up their efforts. So far, Liddell has concentrated on naming and […]

NU spends £150K on LTC push

Norwich Union is launching a £150,000 marketing campaign to help IFAs sell its new long-term care product. IFAs will receive a marketing package which includes a CD-Rom, a video from the US and an LTC presentation kit. The three-disk CD-Rom set forms an LTC encyclopaedia, with the first disk providing background information, the second looking […]

Greece: the sideshow continues

Artemis managers James Foster, Mark Page and Laurent Millet comment on the Greek deal, describing it as “just another fudge” getting in the way of bigger developments in China, the UK and the US. To read the full article click here.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment