Custodians Continue to Transfer Risk
It has been slightly over a year since Schwab/TD Ameritrade announced their requirement that all advisors on their platform purchase errors and omissions (E&O) liability insurance. Since that time, Fidelity and Pershing have followed suit.
While each custodian has laid out their requirements, it is important to note that each custodian has slightly different twists regarding their requirements for errors and omissions liability, social engineering coverage, theft of client monies, and cyber insurance (Pershing is the only custodian currently requiring cyber coverage). Each has also demonstrated a commitment to enforcing their requirements and holding advisors accountable for compliance.
The Uhl Agency has thrived due to our relationships with Schwab/TD Ameritrade, Fidelity, and now Pershing.
Many firms that are now required to purchase E&O insurance cannot understand why they need the coverage. However, we recently had a claim from a new buyer who had a $310,000 trading error claim four months after purchasing the coverage.
Please give us a call if you need E&O insurance or would like to discuss your current coverage with us, as we have been fortunate enough to provide consultation to over 300 firms this year alone.
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