Leaving UK Tip 4 Beware Expat Financial Advisers

Published / Last Updated on 01/09/2023

We have a number of sayings here at FinancialAdvice.net:

  • “Move to Spain and lose your brain”.
  • “Don’t leave your brains at the airport”.

You should also be aware that inheritance laws, tax laws, tax treaties, social security laws, social security treaties as well as financial regulations differ in all countries.

There are some very good expat financial advisers but sadly, we have come across many clients who have been advised by unauthorised financial advisers or others that have no fee or commission disclosure requirements in their country’s regulations and they promptly mis-sell British expats with pension transfers or new investments that have huge early exit penalties, some have been as high as $50,000 to $60,000 across many areas including the Middle East, Singapore, Spain, Australia and New Zealand and people then ask why is this so?  We never knew or were not told.  These large penalties are usually because huge initial commissions and large ongoing % yearly commissions are being paid to the adviser.

Chiringuitos Financieros

The Spanish stock markets regulator, the Spanish Securities Market Commission (Comisión Nacional del Mercado de Valores CNMV) even has a term for rogue advisers in Spain: “Chiringuitos Financieros” – financial cowboys or financial ‘fly by nights’.

Verify Your Financial Adviser and Make Sure They Disclose Their Fees

In short, think and plan early about who your financial advisers are going to be if you are already overseas or if you are planning to move overseas for work or retirement.  There are rogue financial advisers out there.

  • Make sure you research who you are dealing with.
  • They are fully authorised where you live and carry the necessary permissions, insurance cover and licences to give advice in the area that you need help.
  • Make sure they disclose their fees before you decide to work with them.

Brexit has not helped and we offer the following guidance when look for advice on your UK pensions and investments.

If You Live Outside UK

We are a UK registered business, authorised and regulated by the Financial Conduct Authority in the United Kingdom.  We are fully insured for advice that we give from the UK to clients all over the world.   That said, we are not authorised outside the United Kingdom and as such, new products and services are usually only available for UK residents.  We are also no longer authorised in the European Union under financial services ‘passporting’ given Brexit.

That said, there are many British Expats and Foreign Nationals living all over the world that have existing pensions, investments, financial or tax interests in the UK.  Your local adviser, where you live, is unlikely to be authorised in the UK meaning they cannot advise on your existing UK interests and likewise, we are not authorised to give advice on new pensions and investments where you live.

EU Residents

The Brexit Trade Agreement did not include financial services passporting although it was supposed to.   Negotiations are ongoing with regard to ‘Equivalency’ on financial services with 5 X Memorandums of Understanding (MOUs) agreed in January 2021.  MOUs are essentially agreements to reach an agreement only.  One of the MOUs between UK and EU regulators confirms that they are working towards ‘delegated authority’ where if an EU resident has a UK pension/investment, then respective EU advisers are not authorised to advice on unless they have set up a UK branch with FCA authorisation in UK and therefore advice will need to be delivered by a UK authorised IFA.  This is where EU regulators delegate their authority to the UK FCA to oversee and regulate the advice on a UK pension/investment.

Given the ‘state of flux’ we are all in as negotiations continue, technically, we are no longer authorised in EU (for the time being).  Fish, wine, cheese, and cars are no problem, but finance is a ‘no’ at present.  We do not ‘solicit’ or promote services to EU residents, but we will accept ‘Reverse Solicitation’ i.e.  you approach us to help you with existing UK taxes, investments, or pensions only.  We will not advise on or arrange 'new money' investments for you, but we will advise on existing UK arrangements that are then actioned/transferred/amended within the UK.  Given this, and until an agreement is reached on Equivalency and Delegated Authority, we will offer the technical advice from the UK on your UK pensions, investments, and tax with our requirement that you also take advice locally in the EU to oversee any actions at 'your end' to ensure tax compliance and reporting requirements with EU authorities.  You should also be aware that there are even greater restrictions for residents of France.  No Fishing = No Finance in France, although they are softening their position to that of other EU authorities where things appear to continue as they were with EU regulators happy that the FCA oversees any UK advice on existing UK products and services.

Please note we have written confirmation from both our professional insurers and the FCA that all advice that we offer must be offered and delivered from the UK, under FCA regulatory rules and FCA protection and that we are permitted to advise people anywhere in the World according to the UK regulator, but we must check if there any regulatory restrictions where a client lives.  In short, we offer advice as if you were resident in the UK and provided that you and your EU adviser check with your EU regulator that they are happy for us to continue UK advice for you in tandem with your local adviser ensuring tax compliance and reporting requirements with EU authorities.  We will require this in writing from your EU regulator/your EU adviser.

Resident Outside Europe

As we are not authorised where you live and your local advisers are unlikely to be authorised in the UK, we operate a similar option to EU residents with 'Reverse Solicitation'.  We do not ‘solicit’ or promote financial services to non-UK residents, but we will accept ‘Reverse Solicitation’ i.e.  you approached us to help you with existing UK taxes, investments, or pensions only.  We will not advise on or arrange 'new/additional money' investments for you, but we will advise on existing UK arrangements that are then actioned/transferred/amended within the UK.  Given this, we will offer the technical advice from the UK on your UK pensions, investments, and tax with our requirement that you also take advice locally in the country that you live to oversee any actions at 'your end' and ensure tax compliance and reporting requirements with your local finance and tax authorities.

Please note we have written confirmation from both our professional insurers and the FCA that all advice that we offer to expats must be offered and delivered from the UK, under FCA regulatory rules and FCA protection and that we are permitted to advise people anywhere in the World according to the UK regulator, but we must check if there any regulatory restrictions where a client lives.  In short, we offer advice as if you were resident in the UK and provided that you and your local adviser check with your country's regulator that they are happy for us to continue UK advice for you in tandem with your local adviser ensuring tax compliance and reporting requirements with your resident country's authorities.  We will require this in writing from your country's regulator/your local adviser.

We already have confirmation from as far away as USA, Australia, Canada (partial), Japan, etc., even the Ascension Islands would you believe?  Also, within the EEA from Hungary, Ireland, Germany, Spain, and Switzerland.  France is something of a joke at present given the number of expats living in France and we are still awaiting replies from Greece, Holland, Italy, Norway, and Sweden’s regulators.  That said, we will still require you to take local advice on top of anything we do in the UK as well as us/you/your local adviser talking to the local regulator just in case anything has changed.

All advice is offered from the United Kingdom with the explicit agreement and understanding that any fee for services is offered under the laws of England and Wales and the English Courts shall have exclusive jurisdiction and no other country’s regulatory or legal systems have any judicial powers over any dealings between us.

Find out about our Leaving the UK Service:  Leaving UK  and all our services (many of which we can offer to expats) Our Fees

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