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Insistent clients and the Fos limit: the week in news

Insistent clients and the Fos limit: the week in news

Another week, another Brexit vote. It's groundhog day.

Outside of Westminster however, it's been a productive week for advisers with multi-million pound takeover bids, insurance woes and warnings over "insistent" clients. 

It's time for the week in news. 

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1) Quilter bids for Lighthouse 

On Wednesday Quilter announced it had agreed a deal to buy national advice company Lighthouse for £46.2m, with the acquisition of the AIM listed business expected to complete during the second quarter of 2019 but the deal is yet to be approved by shareholders. 

The acquisition would add 400 advisers to Quilter's advice arm Intrinsic, but questions were later raised about the integration of Lighthouse's national business which is still awaiting a decision on whether advisers will be independent or restricted. 

It's the next stage in an already busy year for Quilter, which acquired financial planning firm Charles Derby in February, quadrupling the number of advisers in its national advice business. 

2) Doctors denied pension tax exemption 

This week the government ruled out creating a tax exemption for NHS scheme members, despite doctors reportedly turning down work for fear of being landed with tax bills linked to their pensions.

Concern about doctors' pensions has been increasing since the introduction of the tapered annual allowance in 2016 which gradually reduces the allowance for those on high incomes - so for every £2 of income above £150,000 per annum, £1 of annual allowance will be lost.

On Tuesday health minister Jackie Doyle-Price recognised pension tax considerations were contributing to senior clinicians retiring early or reducing their NHS commitments but said there still was not a case for tinkering with pension tax policies.

She said: "[There is not] a case for exempting high earning NHS staff from a tax measure that is intended to apply to high earning individuals.

"And I don’t think that clinicians expect to be treated differently from other taxpayers."

3) Advisers warned to steer clear of insistent clients 

Warning bells were sounded this week for advisers who deal with insistent clients. Daniel Kelly, director at Onyx Insurance Brokers, told a Prudential webinar it would be difficult for advisers dealing with this type of customer to get professional indemnity insurance as insurers view this as a high-risk area. 

He said: "We have some insurers that provide cover for DB but exclude insisting clients.

"We have other insurers that [dictate that] if you want cover for insisting clients, then first you need to confirm that you're following the FCA rules, and further they expect to see copies of the letters from the clients confirming that they accept what you're saying, but they want to do something else."

4) Fos rise makes waves in PI insurance market

April Fool's Day saw the implementation of the Financial Ombudsman Service's compensation rise, with the limit jumping from £150,000 to £350,000. In its wake the week has been a turbulent one for advisers with concerns over their professional indemnity insurance, with many insurers at the beginning of the week yet to increase their cover to match the higher amount.