Compliance management and the freedom to choose

NCG Professional Risks Ltd, the UK’s leading specialist in IFA Professional Indemnity Insurance, has announced that they are removing the requirement that a firm must utilise the services of Bankhall Investment Associates in order to qualify for preferred terms under the facilities they arrange.

For a number of years NCG has offered to arrange preferential PII terms to Bankhall members as it appeared they were the only real compliance management option open to the industry. This is no longer the case and therefore NCG feel it appropriate to embrace the fact that IFA firms should be allowed a choice without detriment to their insurance terms and conditions.
Neill Cotton, Joint Managing Director of NCG stated, “With increased regulation and the assistance of compliance management support firms NCG’s clients have demonstrated to insurers that they have an excellent culture of compliance, dedication to professional qualifications and ongoing education and training plans. These characteristics have given insurers a great deal of comfort and they have accepted that firms should be free to choose the most appropriate and cost effective methods for addressing these important areas of their business. Many firms have grown to the extent that they appear to be frustrated that their current compliance management service provider may not provide flexible enough services to meet their current and ongoing requirements. We appreciate that over the past few years there has been an increasing number of compliance management firms established, providing services to the Financial Services industry, and it is therefore entirely appropriate that firms should be able to select the service provider that most suitably meets their requirements.”
Jamie Newell, Joint Managing Director of NCG Professional Risks Ltd said “We have supported Bankhall for some time. This arrangement has been reviewed and it is no longer considered appropriate to place a restriction, such as being a Bankhall member, on clients in order for them to access preferred PII terms. In order to maintain access to our preferred facilities firms will have to demonstrate robust systems and controls or have engaged the services of a support provider who has a track record of delivering at an appropriate standard. This will open the way for far more firms to access our preferred facilities.”
Jamie Newell and Neill Cotton stated “It is important to insurers that the compliance management service provider being selected by firms is capable of supplying bespoke services with a primary focus on managing compliance and regulatory risk. Firms such as ‘threesixty Services’ appear to have this focus and are therefore fully endorsed by NCG. Any firm utilising their services should see a reflective benefit in the PII terms we are able to secure for them. Additionally firms that encourage their respective advisors to embrace PFS membership, with their culture of promoting professional qualifications and training, should also benefit.”
David Brattesani, former Director of Bankhall and founding Partner of ‘threesixty Services’ said “I am pleased that NCG are taking a responsible attitude with regard to the risks within their facility. Too many support providers have diluted their offering to the point where they are not genuinely offering added value and it is important that PI brokers such as NCG protect the interest of those IFA’s who are investing in genuine support services and maintaining appropriate systems and controls. threesixty enjoy a fantastic relationship with NCG and over 200 of our clients are covered under NCG’s preferred facility. NCG have confirmed that they and future threesixty clients will continue to benefit from these preferred terms.
PI rates have softened over the last two years, but I can recall a very different market in 2002, with many IFAs struggling to obtain adequate capacity at competitive rates. Throughout that period, NCG and their insurers were on hand to ensure that IFAs had access to appropriate compliant cover, and I am convinced that they will continue to represent a robust PI facility in the future”
Jamie Newell said “NCG provide PII cover to thousands of IFA firms and it is important that these firms are reassured that any decision to change their compliance management will have no detrimental effect on the PII terms they currently have and the terms NCG will be able to secure for them in the future. Any intermediary who would like to discuss their PI requirements should contact our specialist team who will be happy to assist them”.