In a recent statement concerning inequality of mutuals and credit unions falling under the Financial Conduct Authority and the Prudential Regulation authority, one panel chairman remarked that small firms are hard pressed to obtain professional indemnity insurance.
Smaller Business practitioner Panel chairman, Guy Matthews, recently stated that these smaller firms, in addition to having to find affordable professional liability insurance cover, also need to cope with dual regulatory demands despite the fact that they don’t pose any significant risks. Mr Matthews also said that the panel does not think there should be any situation where only the biggest firms, and the ones that can afford business liability insurance easily, should be the ones that survive.
Warning that the RDR was hitting small businesses in a disproportionate manner, Mr Matthews commented that the FSCS levy will require greater funding due to the ongoing effects of the recent global financial crisis. Smaller firms are having an exceedingly difficult time when it comes to planning, he added, again saying that this is only exacerbated by the expense and difficulty of obtaining insurance cover.
Hertfordshire-based Church Hill Fiance’s principal, Anthony Badaloo, also spoke out upon the issue by saying that these regulatory decisions have much bigger effects on smaller businesses than larger ones due to the larger amount of time that a small adviser will spend upon it. Mr Badaloo continued, stating that the proportion of the cost inherent in being an IFA is the largest out of all the professions of which he was aware, and that the FSA needs to provide more support since small businesses make up the largest percentage of the market, yet have the lowest complaint levels on record.