DBS members who feel spurned by the network's decision not to pay professional indemnity run-off cov...
DBS members who feel spurned by the network's decision not to pay professional indemnity run-off cover for ex-members and retirees have sought legal advice from Nottingham solicitors Fraser Brown.
IFA Online reported last month that the Network Action Group, which involves around 200 former and current members of DBS, are looking into a possible breach of contract over DBS' plans to change payments for professional indemnity run-off cover.
The issue could possibly challenge DBS' Statement of Practice, which the network does not class as a legal document, sources told IFA Online. NAG is asking that it be recognized as a legal contract from the network because its proceedings are seen as that by members.
Until now, DBS' Statement of Practice has maintained that past members would not need PI run-off cover once they left the network because all cases conducted while part of the network would be supported by a DBS policy.
However, DBS' announcement in September to change this and ask ex-members to buy their own run-off cover has angered many advisers because it could now cost ex- and retired members thousands of pounds to obtain suitable cover.
A spokesman for NAG is reported to have said: "We want to get as many IFAs involved as possible. It is mainly to do with run-off cover for ex-members but there is also the issue of pensions review charges."
This is the second time the NAG has sought Fraser Brown's legal services. The first time was in May: the legal firm was hired to draft a letter to DBS in relation to an increase in charges. "We didn't receive a reply," says Jill Bendow, the solicitor overseeing NAG's requirements.
Bendow says Fraser Brown is currently investigating whether NAG have a case and more information will be released next week.
There are also plans to set up a dedicated area on Fraser Brown's website for DBS members seeking more information.
Martin Finch, communications manager for Misys IFA Services, says the company's position remains firm on PI run-off cover.
"We consulted members and the message was they wanted cover to be as low-cost as possible. That is why IFAs are being offered run-off cover through broker Windsors. Other than that we don't have anything else to comment on at this time."
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till