Self-insuring not the answer to transfer advice
With regards to the article about advisers being urged to self-insure (October 3): The only issue with self-insuring is that you are then excluded from undertaking ongoing advice in relation to defined benefit pension schemes.
During a recent Financial Conduct Authority visit we were informed that we could self-insure our back book, but, as our professional indemnity insurer had limited the cover on DB work to £500,000 and not provided the full £1.25m purely in relation to DB advice, that we would have to vary our permissions and relinquish DB activity.
We have had zero complaints ever on anything. And only 23 per cent of cases advised on were advised to transfer from DB scheme and the cases checked, pre-visit by the FCA were passed without comment. Yet we are now being prohibited from being able to provide a full service to our clients.
The actions by the PI insurers and the FCA’s clear intention to close down this sector will limit clients ability to access quality advice.
Ironically, we know of companies where DB transfers account for 100 per cent of their work who are still operating and have not been visited by the FCA.
DB transfers were less than 10 per cent of our business so we are clearly in business for the long term. We have never accepted execution-only or insistent client work and will not close in the future leaving everything with the Financial Services Compensation Scheme – so where should the priority be with the FCA?
Govt ‘deluded’ on PI cover
I wonder how many companies would agree with the government that PI insurance works well for the majority of companies.
PII is invariably expensive. Too often the insurers impose exclusions or repudiate claims for one reason or another. If you do make a claim or even the suggestion of a potential claim, you may find it much harder or even impossible to get cover in a subsequent year. What is guaranteed is a higher premium.
These plans are for disaster cover and once the disaster has been dealt with it is doubtful if the company would continue anyway.
If this is what our government thinks works well they are deluded as with so much else.
One platform is plenty
Rory Percival is quite adamant that using one particular platform is just “not on” and he “doesn’t care what the reasons are that a firm may just use one platform, and neither does the FCA”, which is all well and good coming from a non-IFA. But often, the reality is that as a client-centric company, the IFA might prefer one platform for their clients because, in their opinion, it does offer the best solution for the client.