Independent Financial Advisors Insurance
We have many years’ experience which helps us to understand the insurance requirements of Independent Financial Advisors
Independent Financial Advisors specialists
01903 444 951
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Why do I need Insurance?
We truly understand the turbulence of the Professional Indemnity Insurance market for independent financial advisors in recent years. Insurance premiums have been very changeable and insurer appetite has been reducing year on year with many Insurers pulling away from the professions completely.
PI cover as part of Independent Financial Advisers Insurance has been a mandatory purchase since 1994 when under the regulation of the Personal Investment Authority.
Now the profession is regulated by the Financial Conduct Authority (FCA) who stipulate minimum levels of required coverage that must be purchased, however the minimum level required may not always be suitable for the company’s needs.
What are the Financial Conduct Authorities (FCA) minimum insurance requirements for IFAs?
Now the profession is regulated by the Financial Conduct Authority (FCA) who stipulate minimum levels of required coverage that must be purchased, however the minimum level required may not always be suitable for the company’s needs. Currently, the minimum levels are:
- €1.25 million for each and every claim
- €1.85 million for claims in the aggregate
It’s also important for firms to ensure that they have:
- Ongoing cover from when your organisation starts
- An insurance policy that has an excess no higher than the minimum level specified
- Adequate cover in respect of Financial Ombudsman Service (FOS) awards
On 1st April 2019, the FOS award limit increased from £150,000 to £350,000. Following this, the Chartered Institute for Securities & Investment warned the FCA that there may be unintended consequences for its SME members.
What risks are associated with financial advisor activities?
IFAs have an increased exposure with the potential for high severity claims which is why it’s essential to invest in the correct insurance policy for your business. Below are some commonly accepted views on professional activities:
Medium risk:
- Estate planning
- Home equity release
- SIPPs
- Pensions
- Mortgages
- Investment advice
High risk:
- Unregulated investments
- Tax mitigation
- Mergers & acquisitions
- Individual investments (over £250,000)
- Corporate finance
“Our priority is always the client. That’s why we aim to provide you with first class service at all times.
Our experienced team offer vast amounts of knowledge and a proactive approach to service. We will take the time to get to know your business as if it were our own.”
Martin Swann
Managing Director, Financial & Professional Risks Division
Cover can include
- Office contents (including multiple locations)
- Directors and officers liability
- Employment practices liability
- Corporate legal liability
- Trustee indemnity
- Crime/fidelity
- Public liability
- Employer’s liability
- Product liability
- Business interruption
- Group travel
- Personal accident
- Computers
- Cyber liability
- Overseas offices/staff
- Intellectual property
- Kidnap and ransom
- Identity theft
- Medical malpractice
- Legal expenses (including contract disputes)
