Financial planners say the high cost of professional indemnity (PI) premiums are preventing them from doing their job properly. Reeling from two surveys which criticised members’ professionalism as well as their usefulness, the Financial Planning Association (FPA) was reported last week to be blaming the rising cost of PI cover for the incidence of bad advice.

The Australian Financial Review quoted FPA CEO Ken Breakspear as saying PI limitations are affecting the kinds of advice planners can give. In other words, their advice is stuck firmly on the conservative side of the advice pendulum. Mr Breakspear is reportedly hoping to attract a foreign underwriter to handle the planners’ PI cover.

We wish him luck. Mr Breakspear didn’t return Sunrise Exchange News’ calls. He has been battling a negative media since a joint Australian Securities and Investments Commission/Australian Consumers Association survey and a damning Ernst & Young report cast doubt on the quality of financial planners’ advice.