Aviva has backed the idea of introducing a compensation fund to help keep advisers trading amid client claims, saying it will reduce the cost of staying in business and allow advisers to serve more low value clients.
The insurer said drawing compensation payments from an industry-wide fund when there is a claim - instead of having to compensate individually through professional indemnity (PI) insurance - would limit the cost for advisers. Advisers facing several claims are often pushed into default due to the cost of paying the excesses on their PI. This is turn sends the claims bill to the Financial Services Compensation Scheme (FSCS), paid for by the industry. Firms' PI cost savings could be passed on to clients, reducing the cost of giving advice and creating better access for consumers, Avi...
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