Financial Advice NZ reveals PI renewal costs

The trade organisation for financial, mortgage and investment advisers has confirmed its renewal prices for the 2021/22 year.

Class 1 FAPs (sole advisers with their own licence), will face premiums ranging from $1,700 to $3,600, depending on the advice stream. 

The liability programme will cover all advice provided by the FAP.

Meanwhile, costs for Class 2 FAPs (licensed FAPs with between two and 12 advisers) will need to pay premiums of between $2,250 to $4,300, depending on the advice stream. 

Terms for FAPs with more than 12 advisers are available "on application", the trade body said.

In a note to members, Financial Advice NZ said: "Professional indemnity insurance is a hardening market and the process to finalise this programme has been robust. These have been uncertain times due to the changing regulatory environment and the risk appetite of insurers."

The trade body said its programme was "competitive in the current market and offers benefits which recognise you belong to Financial Advice NZ as your professional body".

According to the organisation, FAPs will be able to continue monthly payments for annualised premiums under $5,000, with no additional interest.

FAPs can choose a limit of indemnity from $1,000,000 to $5,000,000, but can provide an excess layer for higher limits.

While those insured under the policy may be eligible for fire and general protection.

Current members of the Financial Advice NZ Liability Programme will receive more information about the new scheme in the next week, and will be sent an email with an online proposal form, due for completion by June 14.