Financial advisers are scrambling to change the structure of personal assets to safeguard property after the HIH Insurance collapse left indemnity insurance under a cloud, according to lawyer David Purcell.
Purcell, a Sydney-based partner with national specialist insolvency law firm Walker Insolvency Lawyers, says the HIH fallout has jolted many advisers into action.
He says many advisers are reviewing the organisation of their affairs to protect personal and family wealth from creditors in the event of business failure.
Purcell says the collapse of HIH has directly exposed its clients to the liability claims and the potential bankruptcy. He says the collapse also highlights that professionals – including financial advisers – cannot only rely on the fact that they are insured to safeguard their wealth.
Purcell says many advisers feel strongly that they need to do something to avoid further panic. However, he says in cases like this, prevention is better than a cure. To start with, financial advisers need to consider structuring their affairs so assets are not in their name. According to Purcell, this means they are less likely to be lost in the event of a claim against them.
