There is a “big chance” professional indemnity (PI) insurance for advising on defined benefit (DB) transfers will disappear, Nigel Chambers told delegates at the inaugural PA360 conference.
Speaking at a panel discussion on DB transfers on 24 April, the CTC Software co-founder and managing director (pictured) told the room the odds were that PI insurance on DB transfers would soon be a thing of the past.
“There is a big chance that PI will disappear and then what do you do?” he said. “Fall back on the Financial Services Compensation Scheme?”
Parkin Consulting pensions and retirement consultant Richard Parkin, who also spoke on the panel, said the Financial Conduct Authority’s (FCA) decision not to scrap the unsuitable transfer advice assumption would drive PI problems.
“This is exactly the reason why starting from the unsuitability assumption is just completely unhelpful, because that is just sending a clear message to PI insurers this can only go one way,” he said.
“The FCA needs to work out how it can regulate advisers more effectively and allow some decent advice to be given while sorting out the bad advisers.”
‘Good luck’
Asked about the future of PI insurance for advisers, Technical Connection head of pension strategy Claire Trott, the third and final panel member, simply remarked: “Good luck”.
Earlier in the same panel session Parkin had argued the FCA should not ‘treat advisers like children’ by maintaining the unsuitable transfer assumption.
In March, Professional Adviser revealed PI insurers were keeping a close eye on advisers undertaking DB transfers by asking them to complete a supplementary questionnaire as part of their renewal process.
The post Big chance PI for DB transfers will disappear, advisers warned appeared first on Retirement Planner.