Financial Advice NZ has announced that a liability programme for members has been launched. The insurance plan will be available to all advisers from 1 July 2021. Financial Advice NZ CEO Katrina Shanks has said that the programme is designed to offer an affordable alternative to Professional indemnity insurance. Sole advisers with their own license, classified as Class 1 FAPs, will be offered premiums ranging from $1,700 to $3,600. While licensed FAPs with 2-12 advisers, classified as Class 2 FAPs, will be offered premiums of between $2,250 to $4,300. Premiums will vary depending on advice streams. The liability programme will be underwritten by NZI and QBE.
“Financial Advice New Zealand chief executive Katrina Shanks says the new liability programme is for its members only and took seven months to put together with its broker Marsh New Zealand.
Shanks says the new insurance scheme is available to all advisers, including financial planners, and will start on July 1.
With PI insurance costs escalating, Shanks says the new liability programme offers great value for money and further incentives for members who qualify for "trusted adviser" status, plus runoff cover for FAPs and individual advisers.
"Professional indemnity insurance is a hardening market in these uncertain times due to the changing regulatory environment and the risk appetite of insurers, and the process to finalise this programme has been robust," she says.
"We have worked very hard on your behalf in a very difficult market.
Class 1 FAPs (sole advisers with their own license), will face premiums ranging from $1,700 to $3,600, depending on the advice stream.
The liability programme will cover all advice provided by the FAP.
Meanwhile, costs for Class 2 FAPs (licensed FAPs with between 2-12 advisers) will need to pay premiums of between $2,250 to $4,300, depending on the advice stream.
Marsh New Zealand central region manager Marijke von Molendorff says the policies are being underwritten by NZI and QBE who have spread the risk 60% - 40% respectively.
She says the features of the programme are different depending on the size and licence class of each FAP and premiums are calculated based on income (see tables below) and people can pick and choose indemnity cover levels.” Click here to read more