PI costs cut for CIFAA members

Yasmine Raso

Senior Journalist, Financial Newswire

10 October 2022

Members of the newly established Certified Independent Financial Advisers Association (CIFAA) will now benefit from reduced Professional Indemnity (PI) insurance costs, after an agreement was formed with global advisory firm, WTW.

Since its foundation in July and now with 29 members, the association aims to apply its members’ professional expertise and experience on policy issues to provide relevant information on policy creation.

CIFAA President, Chris Young, said the association’s “high standards and rigorous investigation” of new member applications allowed it to appeal to international insurers, assisted by WTW’s wide reach.

“CIFAA members must operate under S923a of the Corporations Act which deals with independent financial advice,” he said.

“This imposes significant restrictions on types of remuneration and associations with product manufacturers. That means that PI claims linked to imbedded conflicts and, therefore, product failures, are less likely.

“What’s also appealing is that almost every CIFAA member is a university-qualified professional. CIFAA can arguably boast that while its membership is still relatively small, the education standards are proportionally, the highest of any financial adviser association operating in Australia. That flows through to the way they run their practices.

“We think that the regulators, ministers and governments in general, are deaf to the continuous complaints coming from the financial advice industry. CIFAA believes we can achieve much more by proactively engaging in policy development with those bodies.”

Brett Sampey, Associate Director of FINEX at WTW, said the firm was pleased to help CIFAA members secure the benefits of lowered PI costs.