Financial Advice Passport for Expat

Published / Last Updated on 26/09/2014

Video explains the Financial Advice Passport for advice from the UK for British Expats in Europe under IMD and MIFID.


"Hello there, Expatriate Financial Advice and something called 'Passporting'.  

[I] thought I would explain what passporting is.  In the United Kingdom we have a financial regulator, the Financial Conduct Authority.  If you go to other countries within Europe they have their own regulators. For example: we have the DGS in Spain which regulates insurance and pension sales or we have the CNMV which regulates the Spanish stock market and direct stock type investments.

As a UK authorised firm we are authorised to give Financial Advice in the UK, a French firm is authorised to give Financial Advice in France, a German firm in Germany, Spanish firm in Spain etc.

Now what is also available is something called "passporting" and for example we [this firm] have a financial services passport. Now, what that means is the UK regulator has given us [this firm] permission to give Financial Advice in Europe. Now we've actually gone for 'blanket' authorisation where we are authorised to give Financial Advice throughout the European Union.  So we have an EU financial services passport.  

So, now moving on, there are two types of passport.  The first type of passport is called the IMD Passport, the Insurance Mediation Directive.   And what that means is a passport under IMD insurance mediation directive, the adviser is authorised to give advice throughout Europe on insurance products, on insurance based investment products e.g. life insurance investments, life endowments and more commonly insurance based investment bonds.   Also pensions, where it is insurance based pensions investment. So, that's the IMD Passport

The other type of passport is MiFID, the Markets in Financial Instruments Directive.  Certain firms, but not many firms, will also have a MiFID passport.  A MiFID passport allows you to give [advice on] real direct stocks and shares and unit trusts and investment trust and SICAVs (which is in the European equivalent of a unit trust.  Those types of investment, you can passport the advice into Europe and give advice throughout Europe on those types of direct more stock type investments as well.

So that's what passporting is, passporting is a authorised UK regulated firm [is] authorised to give advice in specific countries or in all of the European nation countries but still regulated in the UK, where all advice has to be given in accordance with UK FCA regulations.  Or if it was a French company passporting into the UK, it would be that French company giving advice in United Kingdom but under French financial services regulations or Spanish financial services regulations etc.  

So be aware, that you may not always be getting Financial Advice from a UK authorised adviser.  Doublecheck it, just in case it's a foreign firm passporting in and therefore your advice is regulated and protected in France or Spain.  Or alternatively, if you are an expatriate, you may feel more comfortable going 'well actually I would rather deal with a UK regulated firm that is UK authorised and has passported its advice into the European country that I now live'.

So that's financial services passporting.  Thanks very much for watching."

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