Profession
Professional liability insurance for Financial Advisory & Investment Management
RIAs, wealth managers, financial planners, and investment advisors.
Risks we see most
What actually goes wrong.
- Unsuitable investment recommendations
- Failure to disclose risk
- Breach of fiduciary duty allegations
Quick qualifier
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Illustrative claim scenarios
How a policy responds.
Suitability claim
Client alleged portfolio allocation was unsuitable after market losses.
Scenarios are illustrative examples of how this coverage is designed to respond — they are not actual client cases, and coverage always depends on policy terms and underwriting.
Where you work
Financial Advisory & Investment Management coverage, state by state.
What E&O covers for Financial Advisory professionals
Financial professional E&O spans RIAs, investment adviser representatives, financial planners, and insurance-licensed advisors, covering claims that advice or account handling caused client losses — unsuitable recommendations, misallocated portfolios relative to stated risk tolerance, execution and paperwork errors, or planning advice (tax, retirement timing, insurance structure) that a client says was negligent. Market downturns manufacture these claims in batches: losses that felt acceptable in the account statement become “unsuitable advice” in a demand letter.
Advisor policies cover negligence in delivering financial services as described in your application — the services schedule matters enormously, because an RIA’s investment advice, an insurance producer’s product sales, and a fee-only planner’s recommendations are different insuring agreements. Forms typically include defense of regulatory proceedings (SEC, state, FINRA where applicable) by sublimit. Custody, discretion, and private-placement recommendations are the underwriting flashpoints. Firms holding client data add cyber liability; those with staff need workers comp. Note we do not provide investment advice — this page is about insuring those who do.
What financial advisors typically pay
Pricing follows AUM/revenue, services (discretion and alternatives cost more), regulatory history, and team size.
| Business profile | Typical annual E&O premium range* |
|---|---|
| Solo planner, fee-only, no custody/discretion | ~$1,200 – $2,500 |
| Solo RIA/IAR, discretion, moderate AUM | ~$2,000 – $4,500 |
| Small RIA firm, several advisors | ~$4,000 – $10,000 |
| Firm recommending alternatives/private placements | ~$8,000 – $20,000+ |
*Illustrative market ranges based on typical small-business placements; your premium depends on revenue, limits, claims history, contracts, and carrier appetite. Not a quote or offer of coverage.
Frequently asked questions
Is E&O required for investment advisers?
A growing number of states require RIAs to carry E&O or disclose its absence, and some custodians and broker-dealer relationships mandate it contractually. Regardless of mandate, arbitration and litigation costs in this space make going bare an existential bet for a small firm.
Does E&O cover market losses in client accounts?
No policy insures market performance. E&O responds to claims that the advice or process was negligent — unsuitability, misrepresentation, failure to follow instructions. The distinction is exactly what your defense will argue, and documented IPS/risk-tolerance files are the evidence.
Are regulatory investigations covered?
Most advisor forms include a regulatory-defense sublimit for SEC/state investigations and, for registered reps, FINRA proceedings. Sublimits vary widely ($25k–$250k); given exam-driven referrals, this is a term worth shopping deliberately.
I am insurance-licensed and also do planning. One policy or two?
One policy can cover both if the application describes both — miscellaneous professional forms are flexible that way. The danger is buying a cheap insurance-producer E&O that excludes investment advice, or vice versa. List every service and license; the form must match the practice.
Related: insurance agents & brokers · cyber liability · E&O basics.