There exists a "nervousness" in the professional indemnity insurance (PII) market which could force more IFAs to offer restricted advice, according to Prudential distribution change director Russell Warwick.
PII contraction "will be one of the catalysts" for especially larger firms to swap independence for the restricted model, he said, as PII providers add ever more exclusions to their terms and conditions following compensation claims linked to high profile failures like Keydata, Arch Cru, and the mis-selling of unregulated collective investment schemes (UCIS). Advisers who remain independent and cannot get full PII coverage for all of the services they offer still have to offer those services, but must hold extra capital in their business to make up for the absence of PII cover in those a...
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