Patron Financial Advice has had its professional indemnity (PI) insurance costs reduced by just over 13 per cent, the dealer group has said.
Patron chief operating officer David Hasib said the dealer group aimed to cut costs for advisers wherever possible and as part of that strategy had worked closely with its insurer to see what the key drivers were behind its PI insurance premiums.
“By working with our insurer we’ve been able to reduce what Patron pays for professional indemnity insurance by 13 per cent, which means our 2011 adviser PI levy is now $1680, down from $1920 in 2010,” Hasib said.
Patron was able to achieve this by showing its insurer how it had alleviated risks through areas including back-office support, practice management and a fee-for-service model.
“We showed that we’d mitigated a lot of risk as more of our advisers were outsourcing their back-office processes to Patron, which has rigorous systems and procedures in place and ensures a more uniform approach, which brought our premium down substantially,” Hasib said.
“Other factors that helped to a lesser extent to reduce our premiums were practice management and our preparation ahead of the Future of Financial Advice reforms, including our network operating on a fee-for-service basis across the board on investments.
“We also demonstrated to our insurer that we had a uniform approach to client portfolio management through Patron working closely with the investor review committee, which is made up of a group of advisers and our professional standards manager.
“We showed that we had a very thorough process when it came to our approved product list as well and how we’re very conscious about research and commercial viability.”
Patron has a network of 52 authorised representatives across roughly 38 firms.
