As part of the Future of Financial Advice reforms announced on 26 April 2010, a consultation paper has been released which provides information, frames issues and raises questions on the need for, and costs and benefits of, a statutory compensation scheme for clients who suffer damage or incur loss as a result of misconduct by persons with whom they have dealt in the financial services sector. Information and comments are sought on issues in the paper which include: (i) the current conditions and prospects for the market in the supply of professional indemnity insurance to licensees; (ii) the experience of respective parties with the process for claiming and recovering compensation for loss or damage arising from a breach of a statutory obligation by a licensee; (iii) trends in premiums for professional indemnity insurance borne by licensees, and on claims experience under those policies, from 2008 when the  requirement for professional indemnity insurance was applied broadly to licensees; and (iv) the effectiveness of current compensation arrangements, including the costs and benefits for consumers and industry of the reliance on professional indemnity insurance as the default arrangement for compensation.