Philip Evans, IFA Sir, The FSA has said it has already produced a short-term initiative, w...
Philip Evans, IFA
The FSA has said it has already produced a short-term initiative, which will help firms such as ours obtain compliant PI cover. We ran this statement and the FSA's letter past a few PI brokers and insurers to establish their view, which was as I had expected.
The damage to the industry has been done. The FSA's actions have come far too late and it is no good expecting miracles.
The FSA has stated the problem is a result of 11 September and that it does not accept it is of its own making. What an interesting comment.
In the early 1990s, the PI insurers warned that if SIB and the PIA abused the pensions mis-selling situation by paying compensation to those who had not suffered losses (and there have been many) they would withdraw from the market. The PIA did pay _compensation' to those who had suffered no loss and the PI insurers withdrew.
Over the past four weeks, I have received 26 telephone calls, eight letters and 30 emails from IFAs also experiencing difficulty in obtaining PI cover. Some have been asked by the FSA to immediately surrender their permission and cease trading. These advisers, like me, have staff and families to support and have done nothing wrong. Their livelihoods are at stake.
The telephone calls I have received show clearly there are advisers out there fighting for survival and under a tremendous amount of stress. This is affecting their health, family and business lives. Two IFAs have told me in confidence that they have considered suicide because they cannot see a way out of all this.
As I live in South Wales, I can remember the early 1990s when quite a few farmers took their own lives as a result of industry and business pressure. I have a strong feeling it is only a matter of time before we all start reading in the financial papers about similar cases involving IFAs.
The FSA must stop its policy now, which is forcing the honest, hardworking advisers out of our industry. This has gone on far too long. More changes need to be made and the FSA must now sit down with the PI insurers and agree on a more appropriate plan so they will rejoin the market.
A starting point would be to only pay claims on provable negligence, only pay when there is a physical and calculable loss and remove general reviews and retrospective/reactive rules.
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