The IAFP is pleased to announce that we have been able to secure E&O coverage for all members who are licensed/registered for the sale of life insurance, mutual funds and securities through the Advocis Protective Association (APA). APA underwrites the plan together with the Economical Mutual of Canada, with the guidance of their broker, Willis Canada Inc.
This plan can also provide coverage for IAFP members who prepare tax returns, act as an Executor, Financial Divorce Specialist, Notary Public or Commissioner of Oaths, and for those who are registered as an Investment Counsel.
We are delighted with the APA’s willingness to provide excellent coverage at competitive rates for IAFP members, regardless of membership in Advocis. While this policy has taken a long time to secure, the Board is satisfied that we have now identified a carrier willing to work with a small group, and willing to adapt to the unique needs of IAFP members. We needed to ensure that the E&O program we endorse will support your financial planning activities in accordance with the IAFP’s Professional Standards of Practice. As such, we urge you to compare this E&O program with your current plan to ensure your financial planning practice is adequately insured.
Please note that the IAFP is not involved in the underwriting process, and will not be answering questions about eligibility or coverage. We would only be interested in feedback on your general experience with the APA, whose direct contact information can be found at the bottom of this message should you wish to make enquiries about your specific insurance needs.
It is important to note that the plan will recognize R.F.P.s, and members who are Investment Counsels. APA has committed to adding both to the application form, on the occasion of their next revision in the first quarter of 2007.
They have also provided a facility to include this information on the present application. Applicants can use the “Other” option in the section of the application covering “Designations”. Where you are asked to provide details, show “R.F.P.” and/or “Investment Counsel”. In the latter case, it is suggested that the following wording be used; “I am a (province) registered Investment Counselor”.
For more details concerning the Plan, please visit the APA website at www.apa-ins.ca. It would be beneficial to review the sections on: Key Highlights/Plan Summary; Premium Rates & Options; and FAQ’s.
Please remember that if you are licensed in more than one province, the options you choose must be the ones with the liability limits that reflect the highest requirement for coverage.
Note that there are four options available to individual applicants, and one that is arranged on a corporate basis for alternative investments. The Advocis Protective Association Plan meets all of the provincial requirements, but as well, offers the highest limits available in the market, with coverage that can range from $1,000,000 to $5,000,000.
Under Option A, there is coverage for those who sell mutual funds, Term Deposits, GICs or life insurance.
Under Option B, there is coverage for those who sell securities, income trusts or limited partnerships, prepare income tax returns or act as an Executor, Certified Divorce Specialist, Notary Public or Commissioner of Oaths, and those who are registered as an Investment Counselor. If you are licensed, registered, or certified in these capacities, you must select Option B. If you require Option B and you are licensed for life insurance, then you will require Option A and Option B. Otherwise, mutual funds, term deposits and GICs are included in Option B, and Option A is not required.
The Investment Counselor coverage does not include discretionary money management activities performed under the registration of Portfolio Manager. It is assumed that members will avail themselves of E&O coverage through their respective membership in other organizations such as the Investment Counsel Association of Canada, whose plan is better suited to underwrite these requirements. Discretionary trading is not covered under the APA Plan under any circumstances.
Under Option C, there is coverage for “fee-only” financial advisors at a reduced rate. This plan makes an important distinction as it recognizes that on occasion there will be licenced advisors who do fee-for-service work, which is included as part of the coverage under both Options A and B, and is distinct from someone who functions exclusively on a “fee-only” basis. If you are unlicensed and operate only in the capacity of developing a financial plan but are paid a salary by your firm as opposed to charging fees, you would be eligible to apply for option C.
Under Option D, $1,000,000 of coverage is provided for Administrative Assistants who are licenced for convenience purposes only. A “Licensed Administrative Assistant” shall mean a Certificate Holder whose duties are limited to providing administrative and clerical support to a Certificate Holder, and who does not sell products or investments, carry their own book of business, or have discretionary control over client transactions.
We have been asked about topping up coverage by individuals who participate in a mandatory corporate plan. Willis is prepared to assist individuals who feel that this could be of value.
Please note that with the Advocis Plan, any firms with whom you are licenced or hold a contract are automatically included for vicarious liability.
You will find the cost of coverage to be very competitive. For example, the cost for Option B is approximately $640 per year for 1 million dollars of coverage. Membership in Advocis is not required, but as you will see on the website, there is a slightly higher Advocis sponsorship fee for non-members than for members. Here is the link to APA’s fee schedule.
You can save $50 in broker fees if you apply on-line for options A or B at the APA website. You will have to set up a website account with APA and log in separately to access the application forms on-line. Note that options C and D can only be applied for using paper applications available on the APA website.
During the application process, you will be asked for the year in which you qualified as an R.F.P. If you are not sure, please contact the IAFP office at 1-888-298-3292.
Please note that if you report a previous “claim”or “incident” on your electronic application, your application will be referred for underwriting approval. You will then be contacted by a Willis representative within 2 business days with further instructions.
In order to help avoid costly delays regarding coverage issues in the event of a claim, and to help Willis adequately assess your coverage, they will require a full copy of your current insurance program wording.
We urge you to contact the Willis service team for more information, or to compare your current plan with the Advocis Protective Association E&O program. Please contact the APA service team at Willis at either 416-646-9888 or toll free at 1-877-646-9888, or e-mail them at information@apa-ins.ca. In doing so, please ensure you identify yourself as an IAFP member.
Larry Jacobson, R.F.P., IAFP President, 2006
Last updated: 21 Jul 2019 11:48 PM
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