The Personal Finance Society (PFS) has called for a complete overhaul of the Financial Services Compensation Scheme's (FSCS) funding to solve the profession's "over-reliance" on professional indemnity (PI) insurance.
The professional body's chief executive Keith Richards said the lifeboat fund was designed at a different point in time and has become "unfit for purpose". "Well-intentioned as it is… [the FSCS] has built up an unknown level of legacy liability over many years," he argued. "It is increasingly proving unfit for purpose and the growing concern over defined benefit transfers, plus a hardening professional indemnity insurance (PII) market, will compound the level of liability placed upon it, which will result in poor outcomes for consumers and the market as a whole." Rising DB transfer...
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