FCA IPRU-INV professional indemnity requirements for financial advisers
Reviewed by Apex Insurance Brokers · Last reviewed 2026-08-05
If you advise retail clients on investments, pensions or other packaged products, your firm sits in a different prudential regime from a general insurance or mortgage broker. That distinction changes which professional indemnity (PI) rules apply to you. This page explains the structure of the requirement in IPRU-INV, how it differs from MIPRU, and why the headline figures are expressed in euros.
Which rulebook applies to a personal investment firm
The FCA maintains several prudential sourcebooks. The one that governs professional indemnity cover for a financial adviser is IPRU-INV — the Interim Prudential sourcebook for Investment Businesses. Within it, Chapter 13 sets out the requirements for personal investment firms, the category most independent and restricted advice businesses fall into. Apex retains 95% of its clients across the professional book, and our page on how we present IFA risks to the PI market explains how those renewals are handled.
By contrast, MIPRU (the Prudential sourcebook for Mortgage and Home Finance Firms, and Insurance Intermediaries) governs PI cover for general insurance intermediaries, mortgage advisers and home finance firms. Both regimes require PI insurance and both derive their minimum limits from EU-inherited legislation, but the detail sits in different rulebooks. Applying the wrong one is a common cause of an inadequate policy.
If your firm is dual-regulated — giving investment advice and arranging general insurance, for example — your policy may need to satisfy the requirements of more than one sourcebook at once. That is worth checking carefully with a broker who understands both regimes.
Why the minimums are in euros
Only some IPRU-INV limits are in euros. For a personal investment firm that is also an IDD insurance intermediary, IPRU-INV 13.1.10R carries over the Insurance Distribution Directive minimums: €1,300,380 for a single claim and €1,924,560 in aggregate. For other personal investment firms, IPRU-INV 13.1.13R sets sterling minimums: £500,000 per claim and £500,000 in aggregate with relevant income up to £3 million, or £650,000 and £1 million above that. Either way, the requirement has two parts:
- A minimum limit of indemnity for any single claim, and
- A higher minimum annual aggregate limit covering all claims in the policy year.
Where the minimums are in euros, IPRU-INV 13.1.15R requires the firm to take reasonable steps to make sure its limits are at least equivalent when the policy is agreed and at renewal, so convert the euro figures to sterling at that point.
Ask Apex to confirm the current IPRU-INV limits for your firm →
Additional cover for higher income
The base euro minimums are a floor, not a ceiling. IPRU-INV recognises that a larger advice firm carries a larger potential liability, so the requirement scales. Firms with relevant income above £10 million must meet a higher aggregate limit from the table in IPRU-INV 13.1.19R — for example £2 million for relevant income between £10 million and £12.5 million.
Separately, the rules address policy excesses. If a policy's excess on any claim is more than £5,000 (IPRU-INV 13.1.25R) — or cover contains exclusions the rules restrict — the firm may be required to hold additional capital resources to make up the gap. In other words, a cheaper policy with a high excess can create a capital obligation elsewhere on the balance sheet.
The practical takeaway: two IFA firms doing similar work can face genuinely different PI obligations depending on their income and how their policy is structured. Sizing cover is not a one-number exercise.
IPRU-INV vs MIPRU at a glance
| Feature | IPRU-INV (Ch. 13) | MIPRU |
|---|---|---|
| Applies to | Personal investment firms / IFAs | Insurance, mortgage & home finance intermediaries |
| Minimum limits | IDD firms: €1,300,380 per claim, €1,924,560 aggregate. Others: £500k / £500k (relevant income to £3m), £650k / £1m above | Insurance intermediaries: €1,300,380 per claim; aggregate the higher of €1,924,560 and 10% of annual income (max £30m) |
| Scaling | Higher cover expected as income rises | Cover linked to relevant income |
| Excess treatment | An excess above £5,000 on any claim triggers extra capital | Excess capped at the higher of £2,500 or 1.5% of annual income (£5,000 or 3% if client money is held) |
This table summarises the structure only. Confirm the current figures and exact wording in the live FCA Handbook before relying on them.
What good cover looks like in practice
Meeting the minimum is the regulatory baseline, but it is rarely where a well-run advice firm lands. Sensible practice includes:
- A limit of indemnity comfortably above the IPRU-INV floor — common commercial options run to £1m, £2m or £5m depending on advice type and volume.
- Cover that reflects your higher-risk advice lines — defined benefit pension transfers and complex investments attract particular scrutiny.
- An excess set at a level you can absorb without triggering an additional capital requirement.
- Clear treatment of past business, appointed representatives and run-off if you wind down.
Because the euro minimums, income scaling and excess rules interact, the safest route is to have a specialist broker map your income and advice profile against the current IPRU-INV rules and then structure the policy around it.
Need PI cover that satisfies IPRU-INV and stands up to FCA scrutiny? Apex arranges tailored professional indemnity for financial advisers.
Get a PI quote →Verify before you rely: the current-rules caveat
The figures on this page are taken from the FCA Handbook as at September 2026. The FCA can amend IPRU-INV, and euro limits must be converted to sterling when you buy or renew. Before you buy, renew or restructure cover, check the live version of IPRU-INV in the FCA Handbook, or ask a broker to confirm the applicable limits for your firm's income and permissions on the day.
Common questions
Is an IFA covered by IPRU-INV or MIPRU for PI?
A personal investment firm giving investment advice falls under IPRU-INV, principally Chapter 13. MIPRU applies to insurance, mortgage and home finance intermediaries. Dual-regulated firms may need to satisfy both.
Why are the minimum PI limits shown in euros?
Only the limits for firms that are also IDD insurance intermediaries are in euros (€1,300,380 per claim, €1,924,560 aggregate), because they come from the Insurance Distribution Directive. Other personal investment firms have sterling minimums: £500,000 per claim and in aggregate up to £3 million of relevant income, then £650,000 and £1 million.
Does a bigger advice firm need more cover?
Yes. Firms that are not IDD insurance intermediaries need £650,000 per claim and £1 million in aggregate once relevant income passes £3 million, and any firm with relevant income over £10 million must meet the higher aggregate limits in IPRU-INV 13.1.19R. High policy excesses can create an additional capital requirement rather than reducing your obligation.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This guide is general information, not advice on a specific policy or a substitute for your policy wording.