The professional indemnity market should work more closely with the FSA, according to the Association of Independent Financial Advisers (AIFA).
Speaking at an FSA workshop yesterday AIFA director general Paul Smee said: "There should also be better regular and direct communication between the regulator and the PI market to increase each other's understanding of the way in which they operate."
Smee added: "The purpose of PI cover must be clearly defined because there is currently a divergence of views between the FSA and the PI market.
"The FSA sees its requirement for PI cover as protecting consumers. This is not what the PI market sees itself providing. PI cover protects firms. This is why we believe that in the long-term, IFAs should not operate without PI cover because it puts their businesses at risk."
