Shrinking Professional Indemnity Insurance market affecting IFA network model
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What some have described as an ‘explosion’ in regulatory requirements placed on IFAs and the resultant costs involved in complying with those regulations – including the transition to a post-RDR environment - are putting a serious strain on the IFA network business model according to industry figures quoted in a recent report on ifaonline.co.uk.
But it seems that regulatory costs are not the only problem. As at least one - and many suspect there will be more to follow - insurer has pulled out of the professional indemnity insurance market, so the shrinking of available professional indemnity insurance cover is adding a further problem for, and possibly threatening the viability of, networks and advisory businesses operating on a national level.