It has not taken long for the warm glow created by last December’s resounding victory for the Conservatives to turn to springtime frost.
Coronavirus has seen to that, threatening economic growth here and in the wider global economy.
Stock markets have reacted accordingly, sliding downhill quicker than a slalom skier.
On March 11, we will have seen how the new, fresh-faced chancellor in town, Rishi Sunak, has factored coronavirus into the government’s spending and revenue raising plans.
I imagine (and of course, I could be wrong) that caution will be the order of the day. Pragmatism over opportunism.
It certainly was my hope for no silly plans to squeeze yet more pips from pension savers, through further restrictions on the right for high earners to enjoy tax relief on pension contributions.
And, as I believed likely, no raising of the rate that insurance premium tax is applied to premiums.
For the financial adviser community, these are challenging times irrespective of the worrying coronavirus issue and major stock market corrections.
Professional indemnity insurance continues to remain a deep and potentially damaging thorn in their side – and threatens to put some advice companies out of business.
The last time I touched upon PII was in a Financial Adviser column I wrote last May in response to the decision of the Financial Conduct Authority to conduct a review of the financial advice market – an exercise it is still undertaking (snails come to mind) and is unlikely to say anything about until the summer is long over and leaves are falling off our trees.
Back then, I mentioned some of the issues that are persuading a number of advisers to give up the ghost – namely painful Financial Services Compensation Scheme levies and rising PII premiums. And 10 months on, I would say the situation has got worse.
A result of the contentious issue of defined benefit pension scheme transfers – brought to everyone’s attention by despicable events at British Steel – and the Financial Ombudsman Service (now armed with the right to award in individual cases compensation up to a maximum of £350,000) ruling increasingly in favour of consumers.
Some providers of PII are now running scared, restricting cover or increasing premiums.
For advisers, shopping around for cover is becoming nigh impossible. It is more a question of like it or lump it.
A few days ago, I met up with Keith Richards, chief executive of the Personal Finance Society – an organisation that continues to battle hard on behalf of financial advisers, while never forgetting the best interests of consumers.
He told me that evidence of soaring PII premiums, restricted cover and ever-increasing excesses is literally mounting by the day.
He then proceeded to give me some examples: one advice company told the PFS that their PII premiums had jumped from £3,700 in 2009 to £45,000 last year, and another is being met with a 47 per cent hike in premiums at renewal.