Professionals continue to grapple with E&O.

Don't need it. Don't want it. Don't think I can afford it. Don't see the point of it. Don't think it will really provide coverage when crunch time comes.

That's the approach of some financial advisors and planners to the question of errors and omissions insurance coverage. They believe that it is unnecessary. These uninsured advisors, one insurance executive says, run in the thousands.

"I peg it at upwards of 50% of all financial planners," claims Bud Bigelow, managing general agent of First Specialty Insurance Corp. Asked for studies or documentation of this number, Bigelow conceded that he had none. Nevertheless, he pointed to his personal experience as an official of one of the biggest errors and omissions carriers in the financial advisor industry.

"I can't document it all, but I can tell you that many people come to us to buy insurance who have never had it before. In fact, this is a very frequent situation that we encounter," says Bigelow.

Mark Goldberg, president of Royal Alliance Associates in New York, calls Bigelow's 50% uninsured estimate "an exaggeration." Nevertheless, he says that the lack of E&O coverage is extensive and frightening. He notes that there are entire firms that can't obtain the coverage.

Many advisors, even those who have it, are skeptics about what the insurance companies are including in their products. "It's too expensive," says a veteran financial planner who didn't want to be named. This certified financial planner, who has a national reputation and runs a one-person practice, said he pays $6,000 to $7,000 a year for errors and omission coverage.

"The policy is coming up for renewal, and I expect that it's going to cost a lot more," he says.

"There's obviously a lot of planners who don't have insurance. It is a big problem," says Steven Kanaly, a fee-only advisor who has his own trust practice in Houston. Although he couldn't cite any studies, he believes Bigelow's figure of those not carrying coverage "might actually be higher."

Obviously there is a problem. Why?

Several practitioners and executives say many professionals find E&O difficult to obtain, or the effectiveness of the coverage to be problematic.

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