PI exclusions not PC: FPA
Restrictions on professional indemnity policies are setting up financial planners and their clients for a heavy fall, according to the Financial Planning Association (FPA). It’s so concerned about the practice it has established a PI insurance broker panel comprising Aon, Indemnity Corporation and Mega Capital to advise its members.
The FPA has been fielding complaints from members over PI exclusions, with common omissions including run-off cover, fidelity, non-disclosure of commissions and claims arising out of the use of non-approved products.
“This is a major concern, particularly when these exclusions relate to specific requirements for FPA membership,” FPA CEO Jo-Anne Bloch said. “Not only are members exposing themselves to claims risk, they are also jeopardising their professional membership.”
She says the FPA consulted widely with members on their PI needs and changes to ensure the policies offer sufficient protection.
The association will be convening an industry think tank early next month to develop strategies to accommodate the needs of licensees and consumers. Principal members are required to have a minimum $1 million in PI cover per individual claim or $2 million aggregate, and not less than 50% of their estimated gross income from financial planning.
The FPA has been fielding complaints from members over PI exclusions, with common omissions including run-off cover, fidelity, non-disclosure of commissions and claims arising out of the use of non-approved products.
“This is a major concern, particularly when these exclusions relate to specific requirements for FPA membership,” FPA CEO Jo-Anne Bloch said. “Not only are members exposing themselves to claims risk, they are also jeopardising their professional membership.”
She says the FPA consulted widely with members on their PI needs and changes to ensure the policies offer sufficient protection.
The association will be convening an industry think tank early next month to develop strategies to accommodate the needs of licensees and consumers. Principal members are required to have a minimum $1 million in PI cover per individual claim or $2 million aggregate, and not less than 50% of their estimated gross income from financial planning.