Best Practice

You are in Business Excellence ⁄ Best Practice ⁄ ASIC finds professional indemnity insurance for financial advisers stable and available but gaps exist

ASIC finds professional indemnity insurance for financial advisers stable and available but gaps exist

15 Dec 2015

From ASIC - Australian Securities & Investments Commission

The market for professional indemnity (PI) insurance in Australia for financial advisers is stable and generally available, but gaps exist between what ASIC expects and some of the insurance products available, an ASIC report into the market for the eight months to June 2015 has found.

Read Report 459 Professional indemnity insurance market for AFS licensees providing financial product advice (REP 459)

All Australian financial services (AFS) licensees must have arrangements to compensate clients and generally this means holding adequate PI insurance. ASIC’s minimum requirements for PI insurance are set out inRegulatory Guide 126 Compensation and insurance arrangements for AFS licensees (RG 126).

While the market was basically sound, the ASIC review found some PI insurance policies do not meet the requirements in RG 126.

The review was carried out in response to AFS licensee concerns about securing PI insurance and the high level of unpaid external dispute resolution scheme determinations.

‘Advice businesses must have adequate PI insurance, and they should make sure this cover measures up with our requirements in RG 126. ASIC will follow up with surveillance of advice licensees’ PI insurance and if we find problems we will take enforcement action,’ said ASIC Deputy Chairman Peter Kell.

Tags:Peter Kell

Earn CPD Points

CPD: The Two-Chapter retirement – a framework for understanding retiree psychology
Introduction Why do financially secure retirees still hesitate to spend, or commit to strategies that would clearly improve their outcomes? This article sets out the Two-Chapter Retirement framework, a new [...]
CPD: China’s next phase – what persistent supply-side growth means for global markets
China’s economic trajectory is shifting, but not in the way many had once expected. Consumption-led rebalancing has not materialised. Instead, economic policy continues to emphasise industrial modernisation, aligned with a [...]
CPD: Ethics and client best interests
In financial advice, acting in a client’s best interest isn’t just a regulatory rule, it’s the foundation of a trusting, successful partnership. This article, proudly sponsored by GSFM, examines the [...]
CPD: Capitalising on global growth in the decarbonisation era
Few themes rival the scale, urgency and long-term significance of climate change. Consequently, regions, countries, companies and individuals are taking positive action to decarbonise the planet and work toward net [...]
CPD: Decoding the compliance signals within AFCA’s Lead Decisions
Introduction In February 2026, the Australian Financial Complaints Authority (AFCA), reached a significant milestone when it issued its 1,000th Dixon Advisory determination[1]. Up until that point, this represented the single [...]