A former Financial Limited network adviser has complained that under its new Tavistock Financial brand, her run-off cover will be stopped.
Helen Kanolik, director at HelenK Financial Advice, was an appointed representative for five years until she retired in December.
Since leaving the network, she received a short letter from Tavistock chief operating officer Ian Henson explaining the post-takeover plans, that PI insurance will finish at the end of the month and suggesting seeking alternative run-off cover.
Ms Kanolik said: “Financial Ltd was taken over by Tavistock, but the run-off cover continued. However I have now been informed by Tavistock that they are no longer supporting this, and the cover will end on 31 October.
“I also understand that Financial Ltd will be wound up, so there will be no principal for any complaints to be addressed in respect of ex-members of the network.”
Ms Kanolik added that she thought she would be paying professional indemnity insurance for the rest of her life.
“I wasn’t happy about it, of course, but it seemed like a good deal in view of the potential for pay-outs - not that I expect any complaints from my ex-clients.
“There is nothing helpful such as who currently provides the cover,” said Ms Kanolik. “It wouldn’t have cost Tavistock any extra to have given that information in their letter. All of this uncertainty contributes to my belief that retiring from being an IFA was the right decision.”
A Tavistock spokesman said: “Every step that Tavistock Investments is taking in relation to the past members of the Financial network and the planned closure of Financial Limited is entirely consistent with Tavistock’s prior agreement with, and commitments to, the regulator.
“Any further developments in relation to the business will be announced by Tavistock in due course when we consider it appropriate.”
Ms Kanolik warned that other ex-Financial Ltd members will be unaware of this change and potentially without run-off cover.
“I have been trying to find out about all this, and to see if I can get new run-off cover elsewhere, but it is looking very unlikely,” she added.
In August, Tavistock confirmedthe creation of a new network, with “the majority” of Financial Limited members being transferred across, following regulatory consent being granted.
This follows Tavistock’s shareholders voting unanimously in favour of its acquisition of Standard Financial Group, parent company of the embattled Financial Limited network, back in February.
The firm’s latest set of results explained: “It is anticipated that in due course Financial Ltd will cease to provide network services and that the entity will then be closed down.
“The establishment of the new network will enable the company to achieve significant operational cost savings, most notably through a reduction in the level of the professional indemnity insurance premium.”
Tavistock is far from the only network having to talk about PI excess.