18th May 2021

IFAA: Are the Insurance Companies leading a Scam Against Your Firm?

I have had a long discussion with a handful of member and other firms about a potential scam that they have had visited upon them. We are talking exclusively about protection not investment products.

For this scam, you need your agency, an Appointed Representative or ex-employee who has advised on protection products using Indemnity from Ins.Co “A”. These cases are moved to another agency either after the adviser’s exit or even before.

Ins.Co “A” sees the transactions but does see fit to inform your firm just moves the cases over to Agency “B”. You are stiffed with an indemnity reclaim and the adviser gets paid twice.

It appears the chosen insurance company appears to see no “duty of care” with you as the original agency. Just to complete the picture; agency “B” may find itself as the next victim and again kept in the dark by Ins.Co “A”. 

I thought this type of behaviour had gone decades ago, clearly not.

Help Needed!

I need to know the scale of this scam. Clearly the investment only advisers and those who are paid on the drip are not affected. But has this happened to your firm recently?

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