Could new IFP register result in lower PI rates? Professional Indemnity Insurance for IFAs

08/02/2010

Written by Neil Pointon

Plans to create a register of reputable financial planning firms have been revealed.

In proposals drafted by the Institute of Financial Planning (IFP), IFA Online states that such an index would list only those firms which are registered with an "appropriate professional body and use cash flow modelling as part of a client solution which would not necessarily lead to a product sale".

The publication goes on to report that "genuine" firms will be required to have at least half of its advisers qualified to either chartered or certified financial planner status.

By being on the register they might be deemed to be of lower risk than traditional advisers and as such could benefit from lower-priced professional indemnity (PI) insurance premiums.

IFP chief executive Nick Cann states that consumers ought to have "a great deal more comfort when visiting a financial planning firm".

Such comments come as PYV chief executive Neil Pointon recently told Money Marketing that those advisers which take written level-four Qualifications Credit Framework exams could find they benefit from lower PI rates than those who take an alternative assessment pass to obtain such certification.

"Professional Indemnity insurance premiums are based on a number of factors including turnover, activities and claims experience, however, any specialist PI broker should also be able to make the case of better rates for those that are deemed more capable," Mr Pointon added.

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