As advisers face the burden of another interim levy from the Financial Services Compensation Scheme (FSCS), Professional Adviser asks insolvency practitioner Ian Richardson why the situation keeps getting worse...
Advisers are paying ever higher FSCS levies for three reasons. 1. Professional indemnity (PI) insurance caps are too low 2. Advice firms' PI is not vetted by the Financial Conduct Authority (FCA) 3. There is little follow up work done by the FSCS to make recoveries Unregulated PI Advisers must have PI cover, but the FCA doesn't vet it. The regulator just wants proof it has been obtained, i.e details of the company and a policy number. This is important because some PI cover excludes claims from previous years' business, meaning that written business is not covered. ...
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