The Professional Indemnity market in New Zealand is experiencing a hardening cycle - increasing premiums, reductions in capacity, and tightening policy conditions.
For the Financial Advice industry this market cycle comes at the same time as a significant change in legislation. The FSLAA (Financial Services Legislation Amendment Act | Financial Service Providers) comes into force on 15 March 2021.
The professional indemnity market for financial advisers has long relied on capacity from only a few insurers. Since July 2020 this has contributed to issues of uncertainty around the continued capacity, and a wider general trend of insurers re-evaluating their participation in particular industry segments.
These factors have led to an environment where it is essential for advisers to the industry to be close to the market.
This is where Curated Risk excels.
Over the past 10+ years I have specialised in advice to financial advisers and their associations and groups. I have advised individual advisers on their own liability programme, advised associations and groups on designing a programme for members and evaluated the suitability of the policies that adviser businesses have in place.
While the Full licence requirements published in November 2020 confirm that the proposed standard condition requiring advisers to hold professional indemnity insurance has not been included, there is a recognition that this is good business practice and contributes to supporting good conduct and advice.
Curated Risk believes that having adequate and appropriate professional indemnity insurance is essential. Any business which is offering advice for a fee, regardless of industry, requires some form of risk transfer product to mitigate the potential for a claim whether valid or completely vexatious. Claims against professionals can take an incredible amount of time, incur substantial costs to defend, and create significant stress, especially for a sole professional or boutique firm.
If you are a financial adviser who is considering how you are going to operate under the new regime, whether or not you intend to operate your own Financial Advice Provider, it is vital to consider how your own insurance programme will help you offer professional advice with confidence.
Curated Risk enables confident decisions about insurance placement through clear advice which cuts through the white noise.
To learn more, follow the links below to recent news articles and webinars:
· Professional Indemnity insurance: What advisers need to know - Good Returns
· Professional Indemnity Insurance webinar with Compliance Refinery
