IFA Professional Indemnity Insurance

Benchmark your IFA professional indemnity insurance with no-obligation quotes from the wholesale market

Compare IFA professional indemnity

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Obtain access to the wholesale insurance market for IFA professional indemnity insurance with a digital broker.
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Make sure you are adequately protected when even the most prudent independent financial advisors can become the target of civil litigation.
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Compare your existing IFA professional indemnity insurance against no-obligation quotes from a range of wholesale underwriters.

Independent Financial Advisor Insurance

Benchmark protection for financial advisory firms with quotes from the wholesale market

Independent financial advisers are exposed to a number of risks while offering their services on a range of financial issues. Ensure your firm continues to purchase the most appropriate and cost-effective IFA professional indemnity insurance because even the most prudent firms can become the target of unfounded allegations.

IFA Professional Indemnity Insurance Guide

  1. IFA professional indemnity insurance
  2. Examples of IFA professional indemnity claims:
  3. FCA insurance requirements
  4. IFA professional activities by risk
  5. How to obtain the most competitive IFA insurance?
  6. Market conditions for IFA professional indemnity
  7. Resources available

Compare IFA professional indemnity insurance with a digital insurance broker by completing our online application.


IFA professional indemnity insurance

Professional indemnity insurance for financial advisors continues to be challenging as a result of expensive allegations across the industry and the FCA's decision to increase the Financial Ombudsman Service (FOS) award limit.

Firms that are unable to demonstrate robust controls with a good claims history are reluctantly paying increased premiums.


Examples of IFA professional indemnity claims:

     
Improper advice

Negligent act, error or omission 

Misrepresentation

Non-disclosure 

Misuse of personal information 

Inadequate investigation

IFA professional indemnity insurance offers protection against the failure to exercise reasonable skill and care in the provision of professional or advisory services. To receive quotes from the wholesale market, please complete our digital on-boarding process.


FCA insurance requirements

The Financial Conduct Authority (FCA) requires all firms carry specified minimum levels of professional indemnity for both a single claim and aggregate claims.

The minimum levels are: EUR 1,250,000 for a single claim and EUR 1,850,000 in the aggregate, however it is your firm's responsibility to take out adequate PI insurance.

For UK based firms, these minimum requirements are translated into sterling and must be met at the date of taking out the policy and at the date of renewal.

Firms should ensure they have:

>  continuous cover since the start of your authorisation;
>  a policy excess that is no higher than the minimum level specified; and
>  cover in respect of Financial Ombudsman Service (FOS) awards.
 
The FOS award limit increased from £150,000 to £350,000 on the 1st April 2019. The Chartered Institute for Securities & Investment has warned the FCA there may be unintended consequences for its SME members.
 
The FCA does not recommend any particular IFA professional indemnity insurance broker. However, they do provide a list of distributors that have consented to their publication.


IFA professional activities by risk

The exposure posed by IFA's has serious potential for high severity claims. With the principle risk arising from monetary loss attributable to the insureds negligence. The below identifies commonly accepted views on professional activities:

 
IFA professional indemnity insurance requirements
 

>  Medium risk IFA activities

>   Estate planning
>   Home equity release
>   Investment advice
>   Income draw downs
>   Mortgages
>   Pensions
>   SIPPs
 

>  Hight risk IFA activities 

>   Corporate finance
>   High profile clients
>   Individual investments +£250k
>   Mergers & Acquisitions
>   Tax mitigation
>   Unregulated investments
 

If your firm operates in traditionally high-risk activities, be prepared to provide additional information to support your application. For example: investment type: amounts; providers; performance; and percentage of your clients investment portfolio.

Clear detail concerning the scope of any high-risk activities will assist in obtaining competitive IFA professional indemnity insurance.


How to obtain the most competitive IFA insurance?

IFA firms should start the renewal process in good time before the expiry date. To obtain the most competitive IFA professional indemnity insurance we recommend you provide copies of your compliance procedures with your application. Insurance underwriters like to see robust procedures and controls to identify, assess and mitigate potential risks.

Preferably this will include:

>  details of any external compliance specialist;
>  details of your file audit process;
>  copy of your complaints register; and
>  biographies and qualifications.
 

Claims are sometimes inevitable, however these should be clearly detailed within a claims schedule highlighting any preventative measures undertaken to guard against recurrence.

At get indemnity we are professional indemnity insurance specialists and can assist in obtaining competitive no-obligation quotes from the wholesale market. Please send all supplements to contact us once you have completed our online application.

 

Compare IFA professional indemnity insurance


Market conditions for IFA professional indemnity

The market conditions for IFA professional indemnity insurance remains stable to hard. If your firm has recent claims history, we recommend you engage with your IFA insurance broker early in the renewal process to ensure sufficient strategic planning.

High-hazard IFA professional activities will remain under pressure to accept premium increases, with less insurers willing to compete. In addition, the FCA's decision to increase the FOS compensation limit has meant a general upwards pressure on renewal premiums.

To compare IFA professional indemnity insurance quotes from the wholesale market and identify whether your firm purchases the most appropriate cover, please complete our online application.


Resources available

The table below shows the average PI Insurance premiums reported to the FCA by financial advisor firms in 2017:

FCA review of IFA professional indemnity insurance premium


This guide is for information purposes and based on sources which we believe are reliable, the general risk management and insurance information is not intended to be taken as advice with respect to any individual circumstance and cannot be relied upon as such.