Huge concern over open-ended liability

87% of advisers support calls to introduce a ‘long-stop’ for the financial advice profession, new research from the NMG IFA Census shows.

57% of advisers surveyed also believe that the lack of a ‘long-stop’ will remain a critical issue for their business for the next 10 to 15 years following the implementation the Retail Distribution Review (RDR).

Advisers cited the ‘long-stop’ as the second most important issue facing their businesses, just behind concerns about how to prosper in a fee paying environment post RDR (62% of those surveyed).

Other issues which advisers rated as being critical for their businesses in the future include qualifications and professional development (38%), and the Financial Services Compensation Scheme (29%).

The research is being released part of the AIFA and Zurich ‘Fair Liability 4 Advice’ campaign. AIFA and Zurich are encouraging advisers to support its campaign for the introduction of a long stop on advisers’ liabilities. The campaign also aims to research the impact on the ability of firms to attract long term investment explore the options available for advisers and help them understand, limit and manage their long term liabilities.

Chris Hannant, policy director at AIFA, said: “This research makes clear the concern within the advice profession about the impact of open ended liability. Despite the backdrop of the RDR it is seen as a critical business issue for advisers. The regulator has previously committed to reviewing the need to limit liability for advice. We are calling for change in the Financial Services Bill or a clear commitment for the FCA to review the issue in the light of its new statutory objectives. We want advisers to give their support for this campaign by signing up at www.aifa.net/fairliability.””