While all investments involve risk for the investors, a considerable risk also exists for the financial professionals who provide services to those investors. Even if you are extremely diligent in the exercise of your duties and enjoy great relationships with your clients today, you could still face a stressful claim or costly litigation from an unhappy client tomorrow.
The Risk to Financial Professionals
While some financial professionals may go their whole career without a problem, others won’t be so lucky. In today’s litigious society, financial advisors and life insurance agents can face complaints and lawsuits, even when they haven’t made any mistakes. Of course, sometimes mistakes are made, and even when they are correctable, your finances and reputation could take a hit. Consider the following:
- Last year, the Financial Industry Regulatory Authority (FINRA) levied $61 million in fines and ordered $25.5 million in restitution.
- Approximately 4,500 FINRA cases are opened against brokers and brokerage firms each year, with other clients seeking remedy outside of the FINRA process through litigation.
- Damages were awarded in 46% of the FINRA cases closed so far this year.
- Each year, almost 200 FINRA cases involve either annuities or variable annuities.
- There are approximately 65 FINRA complaints each year over fee charge errors
- Lawsuits can take a considerable time to resolve even without a trial, while the turnaround time to resolve a client dispute filed with FINRA is about 14 months.
As a financial professional, you also need to consider how the new Regulation Best Interest ruling from the SEC impacts you. With high publicity, industry confusion and individual state rulings about fiduciary rule, RIAs and investment advisors need to act.
Not only do you need to work towards meeting Reg BI compliance guidelines, you need to ensure your Errors and Omissions insurance contains fiduciary coverage.
How Errors and Omissions Liability Insurance Can Protect You
With Errors and Omissions Liability Insurance from Lockton Affinity Advisor, you can help protect yourself and your career from unexpected. Errors and Omissions Liability policies cover certain legal fees, judgements or settlements resulting from claims and litigation brought against you for the services you provide.
Errors and Omissions Liability coverage from Lockton Affinity Advisor protects against risks associated with a broad range of professional services.
Plus, it includes fiduciary coverage automatically. This coverage meets ERISA standards, including services as an ERISA 3(21) and 3(38) advisor, ensuring any fiduciary duties you perform are covered.
The Lockton Affinity Difference
Our goal is to ensure that you receive insurance and service that stands out above the rest. While other industry groups and associations offer Errors and Omissions Liability Insurance policies with shared aggregate limits, Lockton Affinity offers coverage with individual limits, so that you will always have access to your full policy limits.
Plus, getting the coverage you need is quick and easy. Your Lockton Affinity Errors and Omissions Liability policy will take effect 12 a.m. local time the day following purchase.
Remember that the most successful businesses are those that prepare for the unexpected. Help protect yourself and your career today with an Errors and Omissions Liability policy from Lockton Affinity Advisor.