The Personal Finance Society (PFS) has urged the Financial Conduct Authority and HM Treasury to relieve the pressure on advisers seeking professional indemnity (PI) insurance during the coronavirus pandemic.
The professional body has written to the regulator and government urging them to introduce temporary measures to relieve advisers of the pressures in obtaining affordable, comprehensive professional indemnity insurance cover.
A four-month waiver for advice firms searching for PI insurance has been requested and HM Treasury has been asked to consider acting as reinsurer of last resort for cover for financial advice firms.
This follows the PFS’ recent calls for long-term reform of the Financial Services Compensation Scheme (FSCS) levy and the professional indemnity insurance market earlier this year.
Keith Richards, chief executive of the PFS, said: “While we acknowledge the FCA and Treasury have a list of urgent priorities at present, the challenges being faced by advice firms with pending professional indemnity insurance renewals and those who have had little option but to accept unacceptable terms or cease trading is leaving the sector and consumers exposed.
“We welcomed the FCA’s pragmatic introduction of crisis reaction measures, such as suspending the 10% reporting rule and extension to key deadlines, but the crisis of PII and consequential impact on FSCS remains at odds.
“Advisers across the country are doing a great job supporting their clients in these unprecedented times so it is frustrating to hear from many of them that the ever-present problem for the profession – obtaining affordable, comprehensive professional indemnity insurance – continues.
“Amid the current crisis, financial advice is more important than ever before and we cannot as a society afford to lose such valuable services, which is why action both short and long-term is required.”