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Investment Managers

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Investment Managers

Investment managers and other professionals providing investment style advice have many exposures whilst conducting their business.

Legislation dictates that Investment Managers must have Crime/Fidelity and Professional Indemnity insurance to protect the fund members.

Whilst not a legislative requirement, obtaining Director’s & Officer’s liability insurance is also prudent to protect their personal assets.

Most Australian Financial Services Licensees providing services to Retail Clients, are subject to specific regulation about the level and types of insurance they must purchase to protect their clients – refer to ASIC Regulatory Guide 126.

A policy typically combines these policies;

 

  • Crime;
  • Directors & Officers;
  • Professional Indemnity;

Options exist to have one Aggregate Limit of Indemnity (this reduces premium costs by sharing the limit across the three policy sections), or to have separate limits for each policy section. The limit of indemnity can be shared across the three policy sections which has the benefit of reducing the overall premium.

Liability in an MIS to the scheme members rests with the responsible entity and the Corporations Act extends this even if the liability is caused by an agents (authorised Representatives) negligence. The following people have duties which can expose them to prospective claims from a wide range of sources.

  • Directors;
  • Officers;
  • Employees;
  • Compliance committee members.