From Adviser Guide:
Independent vs Restricted 1hr
Q: What impact will being restricted have on PI insurance?
For legacy business there will be very little impact, according to George Higginson, chief executive of Sesame Bankhall Group.
In terms of the future impact, Mr Higginson said this will depend on the nature of the restricted proposition.
If high risk advice is excluded from the proposition, Mr Higginson said in time this may mean lower PI premiums for the firm.
But on a direct comparison with independent advice, Andrew Power, lead Retail Distribution Review partner at Deloitte, said the reduced scope of restricted should reduce the potential for unsuitable advice/maladministration.
He said being restricted therefore may result in a comparatively lower premium for restricted firms compared to independent advice firms.
In addition, he said the increase in professionalism of all advisers could have a downward impact on professional indemnity insurance premiums as the likelihood of poor advice should reduce.
However, Mr Power said any increased costs will need to be factored in the cost of advice are therefore recovered from adviser charges levied on clients.
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More in this guide
- Q: What does independent mean?
- Q: What do I have to do to be independent post 2012?
- Q: What are the pros of being independent post 2012?
- Q: What are the cons of being independent post 2012?
- Q: What impact will independence have on PI insurance?
- Q: What does restricted mean?
- Q: What do I have to do to be restricted post 2012?
- Q: What are the pros of being restricted post 2012?
- Q: What are the cons of being restricted post 2012?
- Q: What impact does my status have on how I charge clients?
- Q: What are the qualification requirements for advisers?
- Q: How should I explain my status to my clients?
- Q: Can I be both independent and restricted?