Apfa and Zurich enter final phase of long-stop campaign
A drive led by the Association of Professional Financial Advisers and Zurich to introduce a long-stop for financial advice complaints is entering its last phase, with a consultation being launched to gather adviser views on how to implement the measure, Chris Hannant has said.
To mark then end of the three-year campaign, Apfa, in conjunction with campaign partner Zurich, will today launch a survey on its website to gauge adviser ideas on ways to address the issue of implementing a long-stop for advice.
The consultation is open until 30 April and advisers have been asked to complete a series of questions which look at the merits of the different options and their viability from an industry perspective.
“There is a clear need to reform the current liability structure in the advice market. We need to find a solution that addresses advisers’ needs and meets the FCA’s standards. The more input and support we have the stronger our case to reform the current liability structure will be,” the director general of Apfa said.
Launched in 2012, the Fair Liability campaign has called for a 15-year cap on liability, with differing limits depending on the nature of the product.
It also advocates the creation of a centrally controlled and funded professional indemnity policy, an insurance policy which would mean the adviser would not be responsible indefinitely. The value of advisers’ business would be higher as there will be no threat of liability.
Apfa resumed talks with the FCA earlier this year and has said that it expects to see progress on the long-stop this year, following a previous delay as the regulator assessed its position in respect to European legislation.
David Geale, director of policy at the watchdog, previously referenced talks with Apfa as he hinted at moves on the issue during an address to an FTAdviser event in February.
Matt Connell, head of regulatory developments at Zurich, said: “It is essential that all IFAs are heard so the survey will help demonstrate how much they care about the issue, and help make the necessary changes to find a workable solution to help address adviser concerns and needs of consumers.”
Adviser View
David Penny, director of Somerset-based Invest Southwest, said: “As an adviser I like idea of a longstop, as a consumer I do not. We need to be responsible, and compelled to ensure our own liability, but do not see how a client poorly advised 16 years ago is different to one advised a few years ago. Who decides which client is protected and which not?
“I support the idea for a funded PI policy and advisers should be compelled to take out the insurance to cover all advice given. It is good that the campaign has raised the issues, we all want lively debate and a fair outcome for advisers and clients alike.”
