The Personal Finance Society (PFS) has urged both the FCA and the Treasury to relieve the pressure on advisers seeking professional indemnity (PI) insurance in the midst of the COVID-19 pandemic.
The professional body has written to the regulator and Government urging them to introduce temporary measures to relieve advisers of the pressures they are facing in obtaining “affordable and comprehensive” PI insurance cover.
A four-month waiver for advice firms searching for PI insurance has been requested, while the Treasury has been asked to consider acting as reinsurer of last resort for cover for financial advice firms.
The latest calls from the PFS come after the professional body renewed its calls for long-term reform of the Financial Services Compensation Scheme (FSCS) levy, as well as the professional indemnity insurance market earlier this year.
PFS chief executive, Keith Richards, said: “While we acknowledge the FCA and Treasury have a list of urgent priorities at present, the challenges being faced by advice firms with pending PI insurance renewals, and those who have had little option but to accept unacceptable terms or cease trading, is leaving the sector and consumers exposed.
“We welcomed the FCA’s pragmatic introduction of crisis reaction measures, such as suspending the 10% reporting rule and extension to key deadlines, but the crisis of PI insurance and consequential impact on FSCS remains at odds.
“Advisers across the country are doing a great job supporting their clients in these unprecedented times so it is frustrating to hear from many of them that the ever-present problem for the profession – obtaining affordable, comprehensive PI insurance – continues.
“Amid the current crisis, financial advice is more important than ever before and we cannot as a society afford to lose such valuable services, which is why action both short and long-term is required.”
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