GT Mortgage Services has been expelled from the Personal Investment Authority (PIA), rendering it unable to conduct authorised investment business.
The PIA’s decision was based around the fact that GT Mortgages Services failed to maintain its professional indemnity (PI) insurance cover, was unable to meet the PIA’s financial resources requirements and did not co-operate with the PIA Ombudsman.
Louise Buckley, press officer at the Financial Services Authority, stressed the significance of PI: ‘PI is important in case a firm gives bad advice. It is not uncommon for us to suspend a group because they do not have PI. However, we will lift the suspension if they get PI.’
To ensure firms have PI, the PIA asks firms to send details of their policy. They also carry out compliance visits. During the last year, the PIA issued almost £5m in fines to 75 firms. From those issued with suspension, termination, or expulsion, the majority were due to not meeting financial resources requirements, not being fit and proper to carry on investment business, and failing to renew PI.