Pt 3. Laws and legal concepts relevant to financial advice - Law of Agency

Question 1

What is an agency?

Answer 1

This is when one party, the agent agrees to de certain acts on behalf of another party, the principle.

Question 2

What place does an IFA hold under the law of agency?

Answer 2

• IFA is the agent of client, and owes duty of care to client.
• IFA owes no duty to insurer, but must comply with relevant FCA rules.
• Client is responsible for acts of IFA.

Question 3

Did you know?

Answer 3

• Insurance companies are not responsible for the acts of the IFA, if informations is disclosed to IFA but IFA does not disclose to insurer.
• Non-disclosure, insurance contract may be void.
• If an employee or self-employed representative of insurer is the agent of insrer, the insurer is responsbile for agents acts and omissions.
• Agents owes duty of care to insurer and complies to FCA rules, but insurer must ensure all agents comply, and is responsible for any non-compliance.