Royal Sun Alliance (RSA) has hiked IFAs’ professional indemnity (PI) insurance rates, in some cases by 100%, following a review of the advice market.
The insurer is also demanding comprehensive information from advisers over their sales of structured products, unregulated collective investment schemes and ‘tax mitigation’ vehicles.
Chris Mellor (pictured), director of Amersham-based The Financial Management Group, was told the next 12 months of cover, beginning from 14 February, would cost his firm 100% more than it had the year before.
Mellor said the firm had arranged a small number of structured products, with unregulated investments accounting for less than 1% of its business last year.
He said the firm had received no complaints in relation to structured products or unregulated investments.
Mellor said RSA had no good reason to hike PI rates and accused it of taking advantage of a lack of competition in the IFA PI market.
‘It’s going up by 100% before the risk of anything else we are doing has been measured,’ he said.
A letter to Mellor from Julie Hustwit, a senior broker at Bartlett & Company, said: ‘RSA has undertaken a UK-wide rate review which has resulted in much higher rates… and there are no exceptions.’