Rob Fink: The inherent problems in financial advisers' PI insurance

The current consultation by the Financial Conduct Authority (FCA) on the Financial Services Compensation Scheme (FSCS) deals with the efficacy of professional indemnity insurance (PII) with a view to reducing the burden on the ‘back stop' of the Scheme. I have spent much of the last five years assisting FCA-regulated firms whose PII has not responded to significant claims - and which, if the firm fails, will fall on the FSCS. In my view, the FCA has failed to appreciate that the problems inherent in PII for firms it regulates are largely created by its own activities. In order to unde...