Fee Protection Insurance

lor

Hi All,

I have a potential client who has asked me if I offer fee protection insurance, atm I don't.

I was just wondering what your thoughts are on this, and do you offer it, and has it been worth it, and do many of your clients use this service.

Also has it been beneficial to your practice or the opposite and the reasons why.

I did try to find previous posts on the subject but to no avail.

Thanks in advance.

Lor

lor

anyone or perhaps not worth doing for micro practises like myself!

deanshepherd

Definitely worth doing.

I started off with a 'client decide' policy which means I get charged, say, £35 per client that signs up. I can then charge them whatever I like for the cover.

I completely avoided the hard sell and just told clients the cover is there should they ever want it. BUT, if they don't want it then just be aware that my costs for handling an enquiry will be charged at £X plus VAT per hour.

I used to have around 15% of clients take me up on the cover which netted me around £1,200 profit each year which justified the hassle of dealing with the paperwork.

After a few years of 'client decide' I switched to full practice cover so every single client enquiry is covered regardless of whether the client signs up or not. However, for those that don't sign up I can bill both the insurers for the work and the client (double time - hoorah!).

My take up is now nearer 30% and my profits from the scheme are around £2,500 per annum plus I know that all my enquiry work will be fully paid for and maybe I will get to cash in on some double-billing too.

Well worth getting a scheme going.

JodieR

To add to what Dean's said, there's another couple of reasons to consider it:
1. I heard from a speaker at a CPD event on enquiries that it is possible that if you don't offer it and a client is selected for an enquiry and they go to an accountant who specialises in enquiries that sometimes those accountants suggest that they sue the accountant (ie you) for failing to protect your clients' interests. I don't know how true this is or how often it happens but it's potentially a nasty situation to be in.
2. I'm pretty sure that the AAT at the very least recommend that MIPs offer enquiries insurance to their clients, I'm not sure if it is actually compulsory or not.

deanshepherd

In reference to Jodies comments above, I think you could very well be held to be negligent if you did not make your client aware that these policies are available (even if you do not offer them yourself).

Get something in your LOE to cover you either way. These policies can be bought independently by clients direct and, if I recall correctly, FSB membership includes a basic level of cover.

Ellabobbin

deanshepherd wrote: »

Definitely worth doing.

I started off with a 'client decide' policy which means I get charged, say, £35 per client that signs up. I can then charge them whatever I like for the cover.

Do you mind me asking which company you use Dean? I have been googling and am now confused by all the different schemes out there

Thank you

deanshepherd

I use Taxwise (formerly Qdos).

Abbey have been going on marketing overdrive to get me to switch recently so it is always worth shopping around for the best deal (i.e. the lowest cost per client).

lor

I'm going to be looking into this...............thank you all for your replies!.