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Independent Financial Advisers

Volume 407: debated on Monday 23 June 2003

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To ask the Chancellor of the Exchequer how many Independent Financial Advisers are operating in the United Kingdom; and how many Independent Financial Advisers had confirmed that they had obtained professional indemnity cover, as at 30 May 2003. [119844]

The Financial Services Authority (FSA) tell me that between 1 September 2002 and 31 May 2003 2,911 Independent Financial Advisers (IFAs) were due to renew their Professional Indemnity (PI) cover. 2,001 IFAs have confirmed that they have done so and 116 have been granted a waiver of the requirement to have PI cover because they have adequate resources.The FSA is in discussion with the other firms, and works with them to find a solution in light of their individual circumstances.IFAs may be reluctant to confirm that they have PI cover until they have a policy document, even if they have agreed terms. This means that the reported position can appear less positive than it is.Last month the FSA authorised a new insurance company that intends to provide cover for IFAs. The FSA also published a consultation paper on its future PI policy in February 2003 and is currently analysing the responses. The FSA is in ongoing discussions with IFAs, PI insurers, PI brokers and other interested parties about the situation in the PI market.