TheAssociation of Independently Owned Financial Planners (AIOFP) is distancing itself from the broader financial planning industry in terms of underwriting risk as it embarks on a professional indemnity (PI) cover search for its members.
AIOFP has commissioned Willis Insurance Brokers — one of the largest brokers in the world — to find a prospective PI underwriter for its now more than 50 member groups.
AIOFP chief executive Peter Johnston says the majority of association members have never made a claim, yet their insurance premiums have spiralled upwards by more than three to four hundred per cent.
Johnston believes a suitable underwriter will be found by mid-August, with QBE Insurance and Lloyd’s of London tipped as potential providers.
The reason for the differentiation, Johnston says, is the all encompassing nature of the recentAustralian Securities and Investments Commission(ASIC)/Australian Consumers’ Association (ACA) survey.
“Unfortunately, the ASIC/ACA report tainted everybody and we are trying to differentiate ourselves from all the players in the marketplace who deal in second tier products,” he says.
Johnston argues as independently owned groups are ultimately responsible for any advice they give, they tend to be more diligent with compliance, and therefore present a lower level of risk to underwriters.
“A lot of people who work for institutions aren’t held liable for the advice they give, whereas our members’ livelihoods depend on the quality of the advice they give,” Johnston says.
