The Association of Independent Financial advisers (AIFA) has issued a step-by-step plan to restore stability to the professional indemnity market for independent financial advisers.

Brokers with large pension portfolios faced massive PI rate hikes of up to 1,000% after the Government imposed penalties at the end of 1998 to redress the pension miss-selling scandal.

AIFA will now chair a forum to improve understanding between IFAs, PI brokers, PI underwriters and the regulator, the FSA.

In addition, the forum will define core broking standards and services for IFAs although these will not be compulsory.

It will also introduce the option of a risk management service IFAs can pay to review their business.

AIFA director general, Paul Smee said: "The PI market for IFAs has had a terrible battering in recent years. We need to restore some sanity to it.

"We must convince the market that the days of retrospective reviews are over so that underwriting confidence can be restored."