Being a financial adviser is all about giving advice. Working in this industry requires a high level of honesty and integrity. Also, you must operate professionally with complete transparency. However, the provision of financial advice can be a legal and regulatory minefield. This means, you need Professional Indemnity Insurance.
You see, there isn’t just negligent advice to consider. There’s improper use of client information, failure to execute a transaction risk, potential loss of documents, breach of trust and regulatory changes. That’s just to name a few.
Professional Indemnity Insurance is the most important insurance policy for financial advisors.
Exposures vary considerably depending on the vast array of unique characteristics inherent within today’s investment service firms. Also, it’s contingent on the nature and scope of the service they provide.Also, consider previous track record with respect to providing returns to investors. Furthermore, the type of clientele that they service. On top of this, their needs must be taken into account. The ASIC regulatory Guide RG126 provides some minimum guidelines and may be complemented by specific association accreditation requirements. Ultimately, it is important to consider your own unique circumstances in terms of levels of coverage provided by your insurance program.
You see, financial advisers need an insurance solution. It must be strong and flexible in order to protect them from legal liability, provide adequate defence costs and other emerging risks. Emerging risks new cyber and privacy legislation requirements or intellectual property constraints. Those with existing policies run the risk of their liability being greater, with the advent and ubiquity of crimes such as cyber-attack, data fraud and social engineering activities, which are likely not to be covered by out dated Professional Indemnity policies.
It is important to remember this, Professional Indemnity Insurance doesn’t just protect you from financial loss associated with third-party claims. It is also an invaluable tool in protecting your and your firm’s reputation. With many new global insurers able to provide more capital for the investment managers insurance market, it’s a great time to re-evaluate your existing Professional Indemnity Insurance arrangements.
Contact us today to make an appointment with a local Broker at FD Beck.