Financial Service Firms

Combination Broker-dealer/RIA firms, Financial Planners, Investment Advisor firms, Investment Advisory Representatives, Pension Consultants, Registered Investment Advisors 

Services offered by financial advisory firms are as varied as the clients you serve including: financial goal analysis, investment strategy development, plan execution tailored to the customer's individual situation, estate planning, education and retirement financing,  pension plan management, tax planning, etc.  The crux of it is that you offer valuable advice in a complex and at times emotionally charged landscape.

 

Combined with the ability to attain compensation via flat fees, fees based on AUM or commissions for product sales, the potential for conflicts of interest to arise exist and informed clients look to advisors with a proven track record supported by professional accreditation, 

As an accredited and trusted financial advisor, delivering specific advice in addition to portfolio strategies to help your clients successfully piece it all together, you should expect the same level of diligence and service from your trusted insurance risk advisor.  As an independent agency focused on serving a few select niches, Distinction Risk is able to focus its time and expertise to understand your business model and the insurable risks you face as a result of the services you provide.

Distinction Risk Solutions is focused on serving individuals and firms with 75 or fewer employees and $5B or less AUM.

Exposures

Knowing the road makes the journey less risky

Risks associated with providing professional advice and recommendations while protecting your clients' information and assets in a highly digital world should be front and center in your exposure assessment and for evaluating insurance protection; however, other exposures from client visitation to employee benefit plan construction, employment and client engagement practices, and bad weather can have a meaningful impact on your bottom line as well.

Liability 

  • Errors in advice provided, recommending investments not compatible with strategy, or execution of plan not in alignment with client goals and risk tolerance

  • Improperly executed or stored client agreements and customer authorizations

  • Fiduciary breach by trading or investing in ways not optimally beneficial to client

  • Failure to ensure maintenance of confidentiality of financial statements and other personal information

  • Misleading/misinterpreted marketing and advertising or client reference without appropriate permission

  • Failure to adequately explain investment risks of various products

  • Missed execution dates leading to adverse tax consequences for client

  • Computer virus or hacking attack of systems results in disclosure of client information

  •  Though less likely to occur in a professional office setting, slips, trips and falls can occur due to loose mats, computer cords, slick entrances and sidewalks.

  • While providing employee  benefit plans investment options aren't monitored resulting in excessive plan fees and underperformance

  • Failure to effectively document reasons for declining an employment applicant or releasing an employee

Property 

Varies significantly dependent upon whether you work from home, lease your office or own your building.  

  • Loss to electronic equipment (computers, printers, servers) and records from: power failure or surges, malicious attacks on computer hardware and software, loss or irreparable damage while traveling

  • Faulty wiring or overheated equipment leading to fire

  • Fund misappropriation and theft

  • Wind/hail in the Central US and increasingly more states, flood nearly nationwide, wildfires in the Mountain West and West 

Personnel 

  • Despite the low hazard nature of an office environment employees can be impacted by auto accidents while out on client visits or from repetitive motion injuries.  

  • Death or injury to a key employee can mean lost expertise, relationships and an impact to your bottom line

Automobile

  • Employees traveling  in their personal vehicles, rental vehicles or company owned vehicles between office locations, to client visits, for business errands or to professional conferences 

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Key Liability Coverages

Meant to cover you and your business for loss allegations from and indemnification of third parties (e.g. customers, visitors to your premises, shareholders, competitors, etc.) arising from bodily injury, property damage or financial damage.  While you'll face some normal general liability exposures, as a financial firm in a highly digitized environment your highest severity exposures will likely come from the professional advice, fiduciary responsibilities and services you offer as well as your exposure to Cyber loss.

CGL
Cyber
Management Liability
Financial Professional E&O
CGL
Cyber
Management Liability

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  • General Liability

    • Premises and Ongoing Operations

    • Products and Completed Operations

    • Damage to rented premises

    • Medical payments to others

    • Personal and Advertising Injury 

  • Professional Liability/E&O (Errors & Omissions) 

  • Cyber - While coverage for cyber perils is far from standardized some key liability coverages available are:

    • Data breach mitigation

    • Network security liability

    • Funds transfer fraud

    • Media liability

    • Social engineering

    • PCI, Regulatory proceedings and assessment 

  • Management/Executive Liability While coverages can be purchased separately, a more encompassing program includes key management liability coverages in one offering, reducing your chances of having unintended gaps, which could leave your organization and you personally open to significant financial consequences.

    • Directors and Officers (D&O) 

    • Employment Practices Liability (EPL) 

    • Fiduciary 

      • Employee Benefits Liability (EBL) 

 

Some things to consider:

 

  • Limits of protection relative to your risk profile, the legal climate of your location(s), your client profile and the overall cost of insurance

  • Defense costs provided within or outside of limits for your liability covers

  • Defense provision basis (right and duty, at carrier option, etc.)

  • Basis of coverage, claims-made vs. occurrence

    • Are claims-made step factors utilized?

  • Presence of hammer clauses

  • 1st and 3rd Party coverage for Cyber and/or your EPL coverages

  • Interplay of Side A, B and C limit availability in D&O coverage

  • When purchased as a full Management Liability suite, are limits shared and if so, how

Focused on indemnifying you for a covered loss to buildings and associated equipment, your business personal property, valuable papers and records, and business income.  It's important to remember you are only made as whole as your coverage is structured for and your causes of loss are applicable to.   Given the generally straight forward property exposures of many advisory firms, your core property, including business income, and general liability needs can likely be met by a BOP (Businessowners Policy) with a few added endorsements.  

Other Property
Fidelity
Business Income
Business Personal Property
Cyber1stParty
Building

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  • Building

  • Business Personal Property

  • Inland marine

  • Equipment Breakdown

  • Business Income with Extra Expense

  • Crime Coverage or Financial Institution Bonds

  • Cyber - 1st Party

Some things to consider:

  • Coinsurance requirements

  • Covered causes of loss: Multiple forms exist, ensure you have the right one for your circumstance.

  • Coverage needs for property away from your business location: Dependent upon the types of property you travel with or move from office to 

  • Deductibles 

  • Levels of Business Income coverage:  Are you subject to a defined dollar limit? Are you covered for actual losses sustained on an unlimited basis for one year?   Is utility service disruption an included cause of loss? Are you exposed to cyber loss and dependent on electronics for your core operations?

  • Loss reimbursement basis:  Actual cash value, replacement cost, agreed to value, functional value or other basis determines the level of indemnification you might receive.

Property Coverages

Additional Coverages & Protection

Beyond your property and key liability coverages, you may have need for additional coverage, dependent upon: whether or not your firm has the number of employees in a state requiring you to provide workers' compensation coverage, whether you provide vehicles for your team to use in business or have them drive or rent autos on behalf of the business, your desire to obtain higher limits of insurance than can be obtained by your primary liability policies.

 

 

 

 

 

 

 

  • Workers' Compensation

  • Employers Liability

  • Hired and Non-Owned Auto

  • Business Auto

  • Excess/Umbrella

Some things to consider:

  • State requirements for providing Workers' Compensation coverage based on business legal structure and employee counts

  • Even if you are not required by law in your state to provide Workers' Compensation, do you have employee exposures which you could be liable for, creating a coverage gap

  • Required underlying limits to prevent coverage gaps between primary and excess coverages

  • Auto coverage completeness:  If your only auto is a business auto, are you or your employees appropriately covered for driving other vehicles?

WC
Hired and Non-Owned
Excess and Umbrella
Business Auto
EL

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Services

With so many risk factors to consider, trust your insurance risk partners to be there when you are facing the complexities of determing the best approaches to insuring them.  Let us help simplify your insurance life, so you can grow your business with one less concern.

  • The Distinction Way - leverages two decades of risk and exposure analysis experience to provide you with a risk profile assessment, coverage analysis and assistance with insurable risk mitigation 

  • Partner provided services

    • Coverage provided by highly rated carriers with strong  financial standing along with policies specifically crafted by industry experts

    • Access to risk control experts with over two decades of industry experience

    • Access to risk management and loss prevention hotline for professional exposures

    • Get covered quickly - Highly responsive underwriters turn around requests for coverage within 48 hours in most cases

    • 24/7 Cyber hotline and other cyber risk resources available when you buy Cyber coverage

    • Risk evaluation and pricing take into consideration your professional organization associations,  professional credentials (e.g. CFP, ChFC, PFS), approach to business

Content on this page is for informational purposes only and may not be applicable to all circumstances.

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