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Proposal form guides
A plain-English guide to the questions on Apex’s professional indemnity proposal form for financial advisers: what each section is for, why underwriters ask, and where firms most often go wrong.
Part of: Professional indemnity insurance at Apex
In short
The financial adviser’s PI proposal form is the firm’s presentation of risk, and the Insurance Act 2015 duty of fair presentation applies to it. Underwriters use it to establish who is insured, how advice is checked, where income comes from and how much exposure the firm has to areas that have driven complaints: defined benefit transfers, SIPPs, unregulated and higher-risk investments, and drawdown. Most of the form asks for counts and values, so answer from the back office rather than memory. Anything material the questions miss should still be disclosed.
An adviser’s PI policy is a non-consumer contract, so the proposal form is the main vehicle for the duty of fair presentation under the Insurance Act 2015. Answering every question is not automatically enough: the duty covers every material circumstance the firm knows or ought to know. If something material does not fit a question, disclose it anyway in a covering note. Our page on why the proposal form matters covers the principle.
Two features of adviser PI shape this form. Claims usually arrive as complaints, often through the Financial Ombudsman Service and often years after the advice. And cover is claims-made with a retroactive date, so the insurer is taking on the firm’s past advice, not just next year’s. That is why so much of the form looks backwards. The IFA PI insurance guide sets out the wider picture.
What to have to hand: FCA register details for every entity and appointed representative; adviser headcount with joiners and leavers; five years of income and last year’s split; case counts and values by band from the back office; your full defined benefit transfer and SIPP history; the complaints log; and current policy details, including the retroactive date. Build the numbers before you start rather than estimating as you go.
Expect every trading entity and trading style with its FCA reference and authorisation date, whether you are an appointed representative of a network, office details, run-off for past entities, expected material changes, and any ARs or introducer ARs of your own.
The help text is blunt: cover is considered only for entities disclosed. If a trading style or old company is missing, assume it is uninsured. Past entities that gave advice and have stopped trading need run-off, under this policy or separately; say which.
If the firm has ARs, each needs its own questionnaire before quoting, because the principal firm is responsible for its ARs’ regulated activities. Planned changes, such as a sale, a change of network or de-authorisation, should be flagged now rather than at the next renewal.
Headcount by category: principals, employed and self-employed registered individuals, unregistered mortgage or protection advisers, paraplanners and administrative staff, plus joiners and leavers over the last twelve months. Then conflicts of interest, including financial interests in platforms, wraps or product providers, and any principal’s link to failed businesses or regulatory enforcement.
Adviser turnover matters because files left behind by departed advisers are harder to supervise and defend. Self-employed advisers sit further from day-to-day oversight. A financial interest in a provider is a classic source of suitability complaints, with the client arguing the recommendation served the adviser rather than them. Disclose it even if you consider it well managed.
How compliance is run, in-house or outsourced; the percentage of new business files checked before and after recommendations reach clients; remote advisers and how they are supervised and audited; FCA data requests or visits; and whether you give restricted advice.
Pre-recommendation checking is the figure underwriters look at hardest: a check after the client has acted finds problems but does not prevent them. Take the percentages from your compliance records, and if they changed during the year, give the current position and explain.
FCA contact matters because regulatory reviews of particular advice areas have tended to turn into waves of complaints. A data request is not bad news in itself; leaving it off the form is.
Expect every complaint, claim and notification ever made, open or closed, upheld or rejected; unnotified circumstances after enquiry of all principals, staff, self-employed advisers and ARs; fraud losses in ten years; declined or cancelled insurance; and current policy details.
The help text is right: underwriters would rather see a long list than discover one later. Include complaints that were rejected and never reached the Ombudsman. For unnotified circumstances, think beyond formal complaints: a client querying poor performance, a file review that found a suitability gap, a past-business review your compliance adviser has suggested. These usually belong with your current insurer as a notification before renewal.
Give the retroactive date exactly as it appears on the current schedule. A policy with a recent retroactive date does not respond to earlier advice.
Year-end date, five years of gross income including all advisers and ARs, the current year’s estimate, last year’s split by category totalling exactly 100%, and the proportion of corporate versus private client work.
The split matters more than the total. Investment and pension advice to private clients carries a different complaints profile from protection, general insurance or corporate employee benefits. Take it from the accounts or back office, and include AR income: leaving it out understates the risk and can leave a gap in cover.
The longest section. It asks for new investments by size band and how many were replacement business; ongoing portfolios by value band; funds under management and the top three funds; concentration limits; borrowing to invest; bond surrenders; how emailed encashment instructions are verified; suspended or failed investments and institutions; a grid of higher-risk products, from structured products, UCIS and mini-bonds to crypto, peer-to-peer and tax-advantaged schemes; and discretionary management and external DFM arrangements.
Underwriters are sizing how much client money the advice touches and how much has gone into products that have generated complaints. Replacement business is asked about separately because switching an existing investment needs its own justification. Concentration questions reflect a recurring suitability failure: too much of one client’s money in one product or asset class.
Answer the product grid line by line. A “yes” on suspended or failed investments needs an investor-by-investor schedule; a spreadsheet is fine. If you use an external DFM, be ready to describe your due diligence and how you check its portfolios fit each client’s attitude to risk. Holding discretionary permissions yourself triggers a separate questionnaire.
Questions cover defined benefit transfers and opt-outs, past and planned; pension transfer specialists; transfer numbers and values; transfers since the 2015 pension freedoms, for clients under 55 and from third-party introducers; clusters from one employer scheme; advice against transferring; insistent clients; referrals to external specialists; overseas transfers to QROPS or QNUPS; pension liberation; guaranteed annuity rates; and drawdown and annuity volumes by year.
DB transfer advice has driven a large share of adviser complaints and claims in recent years, and many policies restrict or exclude it. The detail lets underwriters tell a careful transfer practice from a problem one: many clients advised against transferring, few insistent clients and no clusters from a single scheme all point the right way. Our page on DB transfer cover explains how policies treat this work.
If you refer clients to an external specialist, the form asks about due diligence and whether a written agreement sets out who is responsible for what. Without one, a claim about the transfer can land on the referring firm.
Expect switches from personal pensions to SIPPs and the receiving providers; SIPPs arranged without advice on the investments inside them; commercial property purchases; DFM-managed SIPPs; acting as a SIPP provider; SIPPs used for investments not regulated by the FCA; and clients from unregulated introducers.
These questions track a well-known complaint pattern: clients moved into SIPPs to hold unregulated or high-risk investments, often via an unregulated introducer, with the adviser saying it advised only on the wrapper. The regulator’s position has long been that advice on a pension wrapper should take account of the investments intended to go into it, so that is not a safe position. Any “yes” here needs full, case-by-case detail.
A grid of mortgage, lending, protection and general insurance activities, from full-status mortgages to sub-prime, self-certification, second charge, bridging, equity release and retirement interest-only lending, plus protection, PMI, household, landlord, ASU and PPI, and whether the firm has ever advised on commercial insurance.
Underwriters are looking for the historic and specialist lines, particularly self-certification, sub-prime, PPI and equity release; equity release triggers its own questionnaire. If you have placed commercial insurance, give classes, volumes and the largest sum insured. It is a different exposure from personal lines and the policy needs to know about it.
Limit, excess and start date. The FCA sets minimum limits and other policy requirements for personal investment firms in IPRU-INV 13.1; firms that also arrange mortgages or insurance should check MIPRU 3.2 too. Treat the minimum as a floor. Your network, your clients and the Ombudsman’s award limit, set in DISP 3.7 and adjusted each year, are better guides; see our page on the FOS award limit.
A higher voluntary excess usually lowers the premium, but DB transfer and SIPP exposure often brings a higher imposed excess regardless. The FCA rules also deal with excesses and exclusions, and some terms can carry a capital consequence for the firm, so check them with your compliance adviser before accepting.
The declaration is given by a director, partner, principal or compliance officer, and the enquiry it confirms extends to self-employed advisers and ARs. Read it: it usually commits the firm to telling insurers about material changes before cover starts. A complaint arriving between submission and renewal must be passed on.
Yes. The form asks for every complaint, claim and notification ever made, open or closed, upheld or rejected. Underwriters use the full history to judge patterns, and a rejected complaint can still be referred to the Ombudsman later.
Because PI is claims-made: the policy in force when a complaint is made responds, not the one in force when the advice was given. Complaints about past transfers can arrive long after the work stopped, so the insurer needs the full history to price it.
Anything that might reasonably lead to a complaint or claim, not only formal complaints: a client querying performance, a suitability gap found on file review, an FCA enquiry about a product area. Notify it to your current insurer before renewal, then disclose it on the form. See our page on circumstance notification.
The minimum limits for personal investment firms are in IPRU-INV 13.1 and have been revised over time, so check the current rule rather than relying on an old figure. Treat the minimum as a floor and set the limit by reference to your clients, your network and the Ombudsman's award limit.
The form asks whether you act as an AR and names the principal firm, because your cover position depends on the network's arrangements. If you need a policy of your own, complete the form in full.
No. It walks through the questions on Apex's own online proposal form for financial advisers and explains why underwriters ask them. Insurers' forms differ in wording, order and definitions, and nothing here reproduces any insurer's form.
Start your proposal online and save it as you go, or upload a completed proposal from your current broker on the first page. Or call 0117 325 0027.
Start your proposal Request a callbackApex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances. It explains the kinds of question asked and does not reproduce any insurer's form or guarantee that cover will be available or on what terms.
