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Sole trader IFA gets PI waiver from FSA

The FSA has granted its first professional indemnity insurance waiver to a sole-trader IFA firm.

The waiver granted to Reading-based Belbury Financial Services is the second year-long exemption permitted by the regulator since the current crisis began.

The move means Belbury will not have to have PI cover until March 2004 as long as it maintains reserves of the higher of £160,000 or 15 per cent of its annual turnover.

This is considerably higher than the £10,000 that IFAs are usually required to have in reserve but the FSA says it is a trade-off for not having PI cover.

The firm&#39s sole trader is registered as Geoffrey Poland and its address is 30 Queens Road, Reading, Berkshire.

In January, the FSA granted The Falcon Group a year-long waiver, meaning the IFA firm, which has 105 RIs, an annual turnover of £10m and capital resources of £939,000, does not need PI cover until January 31, 2004.

Two weeks ago, FSA head of investment David Kenmir told Money Marketing he had received over 20 applications from small firms for PI waivers and is open to hearing from any firm interested. Belbury is the first of these firms to get an exemption.

Pensions & Investment Management principal Phil Moore says: “Being a small IFA, I look favourably upon this news. There is a massive problem with PI and the industry needs help, especially small firms.”

LIA head of public affairs John Ellis says: “This paves the way for more small firms to apply for a waiver but a lot of them do not have a lot of resources. I will be telling all the LIA&#39s members to follow this example.”

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