Daily Insurance Industry News
 
 
Daily Insurance Industry News
Monday 24th of September 2018
September 20, 2012

Zurich calls for changes to advice liability rules

by Gill Montia

Story link: Zurich calls for changes to advice liability rules

Zurich calls for changes to advice liability rules

Zurich has joined forces with the Association of Independent Financial Advisers (AIFA) to launch a new report setting out recommendations to create a fairer level of liability for advice.

The insurer and AIFA are calling on the Government and regulators to amend the rules regarding complaints on financial advice, arguing that open-ended liability is hindering the development of the profession.

The options recommended include:

• A straight 15 year cap on liability

• Differing limits depending on the nature of investment e.g. a limit of 10 years for a short-term investment (0-5 years) and a limit of 20 years for a long-term investment (15 years+).

• Customer agreed liability – where the client and adviser “sign off” advice given up to a particular point e.g. when a customer reaches retirement the adviser could ask the customer if they were happy with the investment advice given in the accumulation phase of their retirement plans and/or if the investment is made with a particular goal in mind (school/university fees), the review could take place once the goal has passed.

• Extended recourse – any advice is subject to a 15 year limit, but long-term investments should be subject to periodical review where the limit is extended from the point of the review.

Zurich’s intermediary sales director, Richard Howells, comments: “If we can achieve a fair level of liability for advisers it will undoubtedly make it more attractive for new advice firms to come into the industry and for investors to put money into growing and developing firms.”

According to Zurich and AIFA, new research suggests that three quarters of consumers support limits on liability for financial advice, while over a half believe advisers should be responsible for the advice they give for less than 15 years.

 

News posted:



Related stories to Zurich calls for changes to advice liability rules: