Fund Managers

What can go wrong?

The basic risk is that returns don’t meet expectations, causing disgruntled clients to look to the fund manager for recompense. Claims, whether justified or not, include allegations of negligence in the management of investments, straying from published investment strategy, breach of mandate and investigation by government agency or regulator.

It’s not just clients that make claims but others affected by the investment decisions fund managers make. Even if there has been no wrong-doing, defence costs can be high because it’s quite likely any claimant will have deep pockets and an expensive solicitor!

Cover considerations

Increased public and professional scrutiny, economic recession, higher client expectation and tougher regulation mean insurance is more important than ever. The cost and quality of cover is variable but should provide adequate limits in the context of the firm’s activities, as well as cover for all the jurisdictions in which claims could be brought.

The Alternative Investment Fund Managers Directive, which came into force in July 2013, requires managers to maintain professional indemnity insurance or set aside funds for potential professional indemnity liabilities.

What are insurers looking for?

The precise nature of the services and advice provided, the historical performance of funds, adherence to investment strategies, good corporate governance, experience and qualifications.

To find out more about
call or email:

Marie Voysey-Moss
FI/D&O Manager
Tel: 020 3757 0122