Amid the ongoing Covid-19 crisis,Shayne Halfpenny-Ray examines which PFS suggestions the regulator has implemented – and another crucial one it has not
It is strange to think that only a few months ago we were talking about the upcoming Budget and our priorities for the long term. Now, we find ourselves in middle of a global pandemic and are very much focused on what it will bring today and tomorrow.
In response to the impacts of the current crisis across the UK and on the economy, the government and the regulator have worked hard to respond to try to alleviate the burdens on people and businesses, both financially and from a health and wellbeing standpoint.
It is within the context of alleviating burdens on firms that the PFS has been working closely with the regulator to ensure financial advice businesses are able to provide their much-needed services throughout and beyond this pandemic. We are therefore pleased that much of what we have urged the regulator to consider has been accepted.
While not an exhaustive list, some of the successful measures we championed on behalf of our members included: suspending the requirement to repeatedly contact a client following a 10% fall in their portfolio; promising flexibility for regulated firms facing financial difficulty and allowing them to use capital and liquidity buffers; and accepting remote verification methods as valid forms of client verification. The regulator has also moved back the deadline for pension transfer specialists to achieve their qualifications, giving advisers more time to attain the new standards.
Of course, not everything has been acted on swiftly enough. At the heart of the great work advisers are doing to support their customers in such difficult times lies an ever-present problem for the market. This of course refers to issues around professional indemnity (PI) insurance.
The PFS has been collecting feedback from members about their experience of the PI market since before the current crisis, with many highlighting the huge increases in premiums they have faced from year to year and the impact this has had on the financial viability of their business.
Amid the current crisis, financial advice is more important than ever and we cannot as a society afford to lose such valuable services. Therefore, in addition to the long-term reform of the Financial Services Compensation Scheme levy and the PI market that PFS CEO Keith Richards called for earlier this year, we have also been urging both the Financial Conduct Authority and HM Treasury to introduce temporary measures to relieve advisers of the pressures they face in this arena.
These measures would mean a four-month waiver for advice firms searching for PI insurance. As part of this, we have also asked HM Treasury to consider acting as reinsurer of last resort for PI insurance.
While these proposals have yet to be implemented, the PFS is in ongoing discussions with the Treasury on the options and how they could help the advice market continue to provide vital support to consumers across the UK.
As ever, our Covid-19 and society resources are at our members disposal, with the latest information and guidance from across the profession and we will keep members updated of any and all developments across the regulatory and policy landscape.
Shayne Halfpenny-Ray is policy and public affairs adviser of the PFS