Most planning groups OK on PI obligations

Australian financial planning groups are mostly meeting their obligations with respect to holding appropriate professional indemnity (PI) insurance, according to the Australian Securities and Investments Commission (ASIC).

A review conducted by the regulator found that of the 56 licensees it reviewed, three did not have PI insurance that complied with the defence costs requirements and those three licensees had subsequently obtained the improved PI insurance or were in the process of doing so.

ASIC announced that its targeted review of PI insurance by ASIC had found that most small companies holding Australian financial services (AFS) licences had PI insurance that met regulatory requirements.

Related News:

“We found, generally, the small AFS licensees that we reviewed had policies with an overall indemnity limit that complied with requirements,” the regulator said.

ASIC said its review had focused on the adequacy of cover for defence (legal) costs, and fraud and dishonesty, in the policies offered by two insurance companies to small AFS licensees and had followed on from its 2016 report which had highlighted these as areas of concern.

Related Content

Adviser permanently banned over dishonest fees

A New South Wales financial adviser has been permanently banned from providing financial services by the Australian Securities and Investments Commiss...more

O’Dwyer points to RC review of ASIC and APRA

The Minister for Revenue and Financial Services, Kelly O’Dwyer has reinforced that the Royal Commission into Misconduct in the Banking, Superannuati...more

FPA and AFA to benefit as planner code monitors

The Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) may experience a strong influx of members if they emerge as t...more




This article was of interest because its title contradicts my personal experience - which is of financial planning forms with no insurance in place or of firms which have insurance in place that is functionally useless.
All ASIC's survey was aimed at was whether firms had adequate cover with respect to defence costs and with respect to fraud and dishonesty - as FOS' statistics about unpaid determinations make clear - there continues to be a very significant issue as to the adequacy of PI insurance arrangements.

Add new comment