Personal Finance Society  

PFS pushes for grace period on PI amid 'evidence of serious impact'

PFS pushes for grace period on PI amid 'evidence of serious impact'
Keith Richards, chief executive of the PFS

The Personal Finance Society has called for a four-month grace period for advisers whose professional indemnity insurance is due for renewal during the coronavirus lockdown. 

In a letter sent to the Financial Conduct Authority and HM Treasury this week the professional body asked for regulatory concessions to help advisers at at time when "demand for their help has never been greater, yet pressure on their own resources are stretched".

This included a call for advisers to be granted a four-month grace period if their PI insurance were to be due for renewal during the coronavirus lockdown, which came into force on Monday (March 26). 

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The PFS said: "There is evidence availability of cover continues to reduce and renewals are being seriously impacted by current lockdown measures introduced by the government to slow down the spread of the coronavirus."

The professional body also asked the regulator to confirm the loans and grants announced by the government in a bid to keep businesses afloat during the market downturn would not breach adviser's capital adequacy requirements.

Earlier this month chancellor Rishi Sunak announced a £330bn war chest of loans to protect businesses against the financial difficulties caused by the coronavirus.

But in an update this morning the FCA promised "flexibility" to regulated firms which may struggle financially during the coronavirus pandemic.

Keith Richards, chief executive of the PFS, said: "These are unprecedented times and to better meet the demand for more financial advice from impacted consumers, advisers will need help from the government and regulator.

"The impact of Covid-19 will make it virtually impossible for financial advisers to talk to clients face-to-face, with the majority now having to reassure clients and help them with their needs over the telephone or internet, while contending with their own personal challenges." 

Mr Richards said the coming months should see stakeholders in the industry focus on maximising the amount of time advisers spend looking after clients.

The PFS also asked for the rule under Mifid II, which requires advisers to notify clients when their investments fall by more than 10 per cent, to be "suspended until further notice". 

Last week the professional body warned this rule was adding to "workload pressure and anxiety for consumers at this time".

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