In a move that The Principals’ Community (TPC) has described as delivering a “modern general insurance solution” to its members, the network for self-licensed financial advice firms has partnered with Numerisk as its preferred insurance business partner.
According to TPC, the partnership follows a “comprehensive selection process” and will be boosted through the launch of an exclusive insurance solution called Aegis.
Having been co-developed by TPC and Numerisk, the product aims to address “emerging and often overlooked risks in the financial advice industry” such as class action exposures, with TPC noting this issue has been under the spotlight thanks to the collapse of Dixon Advisory.
In a submission to the Dixon Senate inquiry, TPC highlighted concerns that a range of factors related to the Compensation Scheme of Last Resort (CSLR) have created a “moral hazard”.
It detailed that where a vertically integrated financial services business is “facing a stream of claims from advice clients in respect of a related party product which has failed or underperformed”, as in the case of Dixon Advisory, the CSLR incentivises the firm to put its subsidiary into administration.
The Aegis solution, TPC said, will provide members with enhanced protection beyond “traditional insurance solutions” for financial advice firms.
“We are thrilled to partner with Numerisk and introduce Aegis to our members,” TPC managing director Kon Costas said.
“This new solution represents 18 months of work and is a significant step forward in addressing the evolving risks faced by our profession.
“Numerisk’s commitment to innovation, challenging the current and their data-driven approach align perfectly with our mission to provide our members with the highest level of support and protection.”
Numerisk managing director and founder Richard Silberman added that the partnership would allow the firm to “work with some of the highest-quality advice practices in Australia at a significant scale”.
“With the support of Kon Costas and the TPC team, we have co-developed Aegis, a solution that will enable TPC members to differentiate themselves in a market segment that has traditionally been difficult to navigate,” Silberman said.
“Our investment in data, data management technology and AI will ensure that Aegis and other companion solutions continue to evolve, helping TPC members achieve the best outcomes in a complex environment.”
