Financial advisers have been struggling with rising professional indemnity (PI) insurance premiums for several years and there seems to be no let up.
Last year, the Financial Conduct Authority (FCA) assessed the situation and concluded that firms could see their premiums skyrocket by between 200-500%, in worst-case scenarios.
The Personal Finance Society (PFS) has been chronicling stories of UK advisers having to turn away clients because of soaring insurance costs, as well.
‘Kick in the guts’
But when PI cover quotes for 2020 landed, one adviser took to social media to share his frustration.
Phil Billingham, director at Perceptive Planning, said on Twitter: “Just received our 2020 PII, feel as if I’ve been kicked in the guts.
“We can pay, have paid, and will survive. But this is not sustainable.”
He added that, combining payments for the industry levy and PI insurance, the sum equates to what two members of staff would cost.
Billingham said that Perceptive Planning didn’t perform a single defined benefit (DB) pension transfer over the last year and that the firm hasn’t had a single claim against it.
Yet, its PI cover has increased by 400% compared to 2019.
Just received our 2020 PII
Feel as if I’ve been kicked in the guts
We can pay, have paid, and will survive. But this is not sustainable
Levy + PII = 2 staff
We don’t do DB any more, never had a claim, never had an advice complaint, no UCIS / dodgy money
Good luck to us all
— Phil Billingham (@PhilBillingham) April 3, 2020
