Tenet has set up a scheme that allows former appointed representatives to obtain run-off professional indemnity insurance with the same level of cover offered to practising advisers.
Using its Guernsey-based subsidiary company Paragon Insurance, Tenet has created a product that covers retiring advisers for any complaints made in the future.
The rates are based on the revenue that advisers earned during their time with Tenet and how long they have been out of business.
Few PI insurers offer run-off cover to advisers and it is increasingly expensive to obtain.
Tenet says practicing ARs are covered by the company’s block policy scheme but the cover ceases when advisers retire or leave their business, leaving them exposed to retrospective claims with no long stop.
Distribution and development director Keith Richards says the ability to provide run-off cover to former advisers is important to the network.
He says: “Offering advisers comprehensive run-off cover has been a Tenet priority for a number of years. Historically, sourcing satisfactory cover has been notoriously hard and often prohibitively expensive. We aim to change all that. Using Paragon’s underwriting flexibility, we have bridged the gap and further extended our range of services to advisers.”
Churchouse Financial Planning director Keith Churchouse says run-off cover will become particularly important as more advisers leave the industry in advance of the RDR deadline.
He says: “It is a good idea, subject to the terms being competitive. Obviously, we have got RDR coming up, which is going to contract the number of advisers in the market.
“Some are going to move to other organisations but clearly some are going to leave the industry altogether and having some form of run-off cover will be valuable to them.”