Professional Indemnity Insurance for Financial Planners: What You Need to Know
- gareth150
- Nov 19
- 3 min read
Why Professional Indemnity Insurance Matters for Financial Planners
As a financial planner, you’re entrusted with guiding clients through some of the biggest financial decisions of their lives — investments, wealth creation, retirement planning, insurance, and asset protection. With that responsibility comes significant professional risk.
A single error, oversight, or allegation of negligence can result in:
Expensive legal action
Damages claims
Reputational harm
Loss of income
Regulatory consequences
Professional Indemnity (PI) Insurance is designed to protect you and your practice from these risks. It is also a compulsory requirement for AFSL holders and authorised representatives under ASIC regulations.
At Clarke Lyons, we specialise in securing comprehensive PI cover for financial planners and advisers across Australia — ensuring you have the right protection without unnecessary premiums.
What Professional Indemnity Insurance Covers
Professional Indemnity insurance typically protects financial planners against claims arising from:
✔ Professional Negligence
Mistakes, errors, or omissions in advice provided to clients.
✔ Misleading or Inaccurate Advice
Claims that advice led to financial loss.
✔ Breach of Duty
Failing to act in the client’s best interest under the Corporations Act and ASIC guidelines.
✔ Administrative Errors
Incorrect paperwork, compliance oversights, or missed deadlines.
✔ Loss of Documents or Data
Electronic files, client records, and confidential information.
✔ Defence Costs
Legal fees, settlements, and investigation costs — often the most expensive part of a claim.
✔ Regulatory Investigations
Costs associated with ASIC inquiries, AFCA complaints, or disciplinary hearings.
Common Claims Financial Planners Face
Even the most experienced financial adviser can face unexpected allegations, including:
Poor or inappropriate investment recommendations
Failure to explain risks
Incorrect advice on superannuation or SMSFs
Misrepresentation of financial products
Errors in insurance needs analysis
Disputes about fee disclosure or service agreements
Portfolio performance complaints during market volatility
PI insurance protects your business — and your personal assets — when these situations arise.
Minimum PI Requirements for Australian Financial Planners
ASIC Regulatory Guide RG 126 outlines specific PI expectations for AFSL holders and ARs, including:
Sufficient cover for the volume and nature of your advice
Run-off cover when ceasing operations
Coverage for representatives, authorised reps, and corporate entities
Claims-made wording compliant with ASIC standards
Clarke Lyons ensures your policy meets or exceeds all regulatory obligations.
The Clarke Lyons Advantage
Financial planners choose Clarke Lyons because we specialise in protecting professional-service firms with complex risks.
✔ Tailored PI policies for advisers
We work with leading insurers to structure bespoke cover based on your business model, whether you offer holistic planning, SMSF advice, insurance broking, or investment services.
✔ Access to Australia’s strongest insurers
We source from a curated panel of reputable, stable insurers who understand AFSL-regulated businesses.
✔ Competitive premiums
Our strong insurer relationships allow us to deliver exceptional terms and value.
✔ Claims support when you need it most
We advocate for you during disputes, investigations, and litigation.
✔ Comprehensive risk review
We assess your procedures, documentation, and compliance setup to minimise future exposures.
For financial planners, insurance is not a commodity — it is a critical risk-management tool. Clarke Lyons ensures you get it right.
Optional Add-Ons Financial Planners Should Consider
Depending on your practice, you may also want:
Cyber Insurance – for data breaches and cybercrime
Management Liability – covers directors, officers, and employment risks
Business Pack (Office Insurance) – equipment, burglary, property damage
Public Liability – for offices with client interactions
Run-off Cover – essential for retirement or business sale
We help financial planners build a complete protection package.
How Much Does PI Insurance Cost for Financial Planners?
Premiums depend on:
Revenue and number of advisers
Services offered (e.g., SMSF, derivatives, wholesale clients)
Claims history
Compliance and AFSL structure
Risk profile and documentation procedures
Most practices fall into a predictable range, but we negotiate individually tailored pricing.
Get a Quote from Clarke Lyons Insurance
At Clarke Lyons, we pride ourselves on long-term relationships, transparency, and exceptional service. Whether you're a sole planner, boutique firm, or AFSL holder, we can secure the right PI solution for your needs.
Contact Clarke Lyons Insurance today to protect your practice with confidence.
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