Financial Advisers Professional Indemnity Insurance — Endorsement

Application

This endorsement attaches to and forms part of the Meridian Financial Services Professional Indemnity Insurance wording, version 1.1.0-DRAFT (document reference 2026/FS/0001), referred to here as the base wording. It changes the base wording only as set out below. All other terms, conditions, exclusions and limits of the base wording continue to apply.

Words defined in the base wording have the same meaning in this endorsement. Where this endorsement and the base wording conflict, this endorsement applies to the extent of the conflict.

The same terms are published as a single integrated wording, Financial Advisers Professional Indemnity Insurance, version 1.1.0-DRAFT. Both documents are generated from the same source and have the same effect.

Replaced: Professional services

The definition of Professional services in the base wording is deleted and replaced with the following.

Professional services

The following services, provided for a fee or other remuneration, to the extent that you are authorised to provide them under the Australian financial services licence shown in the schedule, or as an authorised representative of the licensee shown in the schedule:

(a) personal and general advice on, and arranging or dealing in, approved products, including superannuation, self-managed superannuation funds, managed investments, securities, life risk insurance and retirement income products;

(b) financial planning strategy advice on investment, superannuation, retirement, estate planning, debt and cash flow, including where the strategy does not involve a particular financial product;

(c) advice to switch from a financial product that is not an approved product to an approved product;

(d) advice to continue holding a financial product, or to reduce or dispose of it, whether or not it is an approved product;

(e) tax (financial) advice provided by a qualified tax relevant provider; and

(f) any other service shown in the schedule as a professional service.

[WP REVIEW: confirm that limiting professional services to services "provided for a fee or other remuneration" is intended. RG 126 may expect cover for advice that is not paid for, or that is given before an engagement is confirmed.]

Added: Approved product

The following definition is added to the base wording, after the definition of AFCA.

Approved product

A financial product that, when the advice was given or the service provided:

(a) was on the approved product list maintained by the licensee shown in the schedule, under its approval process; or

(b) had been researched and approved in writing by the licensee for the particular client, under that process.

The licensee's approval process is its documented process for researching, approving, reviewing and removing financial products before they are recommended to clients.

If the schedule states that the licensee does not maintain an approved product list, every financial product that you are authorised to advise on is an approved product.

Advice to acquire a financial product that is not an approved product is not a professional service. This is so even if the claim alleges that the licensee did not follow its approval process. Paragraphs (c) and (d) of the definition of professional services, which deal with switching and holding advice, are not affected.

[WP REVIEW: confirm with the underwriter, and against RG 126, that limiting cover to approved products is compatible with the cover RG 126 expects, in particular where the claim alleges that the approval process was not followed.]

Added: Product Issuer Failure

The following exclusion is added to the base wording, after the Investment Performance exclusion.

Product Issuer Failure

For loss caused solely by the insolvency, fraud or failure of the issuer or operator of a financial product, or of a platform or custodian, that you did not control.

This exclusion does not apply to a claim that your advice to acquire, switch to or continue to hold the product was negligent or was given in breach of your duties, including a best interests duty, where that advice is a professional service.

Added: Market Participants

The following exclusion is added to the base wording, after the Product Issuer Failure exclusion.

Market Participants

Arising from your activities as a participant of a licensed financial market or clearing and settlement facility, including executing orders on a market for clients.

This exclusion does not apply to advice to buy or sell a financial product, or to arranging for a market participant to execute a client's order.

Financial Advisers Endorsements

The following endorsements apply to this policy only when the schedule shows that they apply.

An endorsement does not apply to the extent that it would exclude cover that ASIC Regulatory Guide 126 requires the policy to provide. Those covers are:

• AFCA determinations, and AFCA conciliated or negotiated amounts we consented to (see the AFCA Determinations extension);
• your liability for the conduct of your representatives (see the Representatives extension);
• your liability for the fraud or dishonesty of your officers, employees and representatives (see the Claims Against You clause);
• defence costs payable in addition to the limit of liability (see the Defence Costs provision);
• one automatic reinstatement of the limit (see the Automatic Reinstatement provision); and
• retroactive cover to the start of your continuous series of cover (see the definition of Retroactive date).

[WP REVIEW: confirm this list of covers against the current RG 126.]

Managed Discretionary Accounts Exclusion

We do not cover any claim, loss or liability arising from your operation of a managed discretionary account service, including investment decisions you make for a client without the client's instruction on each transaction.

This endorsement does not apply to advice to a client to use a managed discretionary account service operated by someone else.

Geared Investment Advice Sub-limit

For all claims arising from advice to borrow to invest, including margin lending and geared investment strategies, the most we will pay in total, including defence costs, is the sub-limit shown in the schedule for this endorsement. The sub-limit is part of, and not in addition to, the limit of liability.

Related Products Exclusion

We do not cover any claim, loss or liability arising from advice to acquire a financial product that is issued, operated or promoted by you, a representative, or a related party, or in which you or a related party hold an ownership or profit-sharing interest.

Named Products Exclusion

We do not cover any claim, loss or liability arising from advice to acquire, switch to or continue to hold a financial product named in the schedule for this endorsement.