Big News From Fidelity
As many of you are aware, last year Schwab introduced insurance requirements for RIAs who use their platform. Fidelity has now followed suit.
The Uhl Agency is well-versed in both the Schwab and Fidelity requirements, which are similar but not quite the same, and is based in Dayton, OH at the heart of the Midwest. The Uhl Agency specializes in this area of insurance, having written coverage for over 400 financial institutions.
Schwab's requirements state that firms using their platform must carry E&O insurance along with coverage to protect against social engineering claims, theft by hacker claims, and theft by employee claims. Schwab requires a minimum aggregate limit of insurance $1M.
Fidelity announced on March 31 that RIAs using their platform will also be required to carry a $1M aggregate limit of insurance consisting of E&O coverage and at least $250,000 coverage for social engineering. Coverage for theft by employee is also required for firms with more than one employee.
Firms utilizing Fidelity as their custodian will have until June 30, 2022 to complete a 1-page attestation declaring one of the three following statuses:
- You currently meet all of Fidelity's requirements
- You currently meet some but not all of Fidelity's requirements, or
- You currently do not have insurance coverage
RIAs without insurance coverage will be required to meet the minimum coverage requirements by September 30, 2022, whereas firms that fall into the second category will have until their current insurance renewal date, but no later than March 31, 2023, to meet the requirements.
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