Professional indemnity insurers may increase premiums for IFA firms which send out treating customers fairly questionnaires to clients as it could lead to a rise in complaints.

PYV chief executive Neil Pointon says firms need to be aware of the consequences of poorly constructed client questionnaires as critical responses may be classed as complaints under FSA rules.

Part of the FSA's definition of a complaint is "any expression of dissatisfaction, whether oral or written".

Pointon says firms must investigate any instance where a customer expresses discontent in a questionnaire, which in some cases may lead to a claim.

He says: "If a questionnaire elicits more claims than you would normally have, that will be reflected in your premium. There could be a rebound effect in terms of excesses and term conditions imposed on policies."

Pointon says TCF questionnaires should be approved by an IFA firm's underwriter.

Collegiate Management Services legal and claims director Martin Archer says most compliance consultants will recommend that firms agree questions with their insurer.

He says: "We get a lot of questionnaires and sometimes we approve them and sometimes we request amendments. They are a legitimate part of an adviser's business but they should not be sent to clients who have not done any business for years.

"If you are inviting people to answer questionnaires who received advice a long time ago, then you are more likely to pick up responses from those who are dissatisfied."

Source: Money Marketing