Checking Out If Your IFA Is Licensed

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Expats looking to switch their UK pension to a tax-effective offshore QROPS need to read the small print to check out fees and running costs.

Like any other financial product, providers charge administration and set-up fees, but keeping an eye on adviser fees is just as important.

Dealing with unlicensed advisers means retirement savers are unlikely to qualify for consumer safeguards.

Third party QROPS, which are based in one country when the saver lives in elsewhere open a whole new can of worms.

It’s unlikely a British expat living in Australia with a QROPS based in another financial centre will gain any protection from regulators in the UK or Australia, so it’s important to make sure these pensions are in well-regulated financial centres, such as Malta.

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Questions for your International IFA

Consumer protection web site Pension Life suggests asking any adviser a set of questions to find out whether they are properly licensed:

  • Regulation – Which country regulates your business and are you regulated in the country where I live as an expat?
  • What does this regulation cover – Some advisers can only sell insurance, while pension advisers need further qualification and licensing
  • What consumer protection is offered by your regulator?
  • What are your qualifications and where can I check them independently?
  • What professional indemnity insurance do you have and does this cover the advice you are giving me?
  • How are you paid for this advice?
  • Will commission be disclosed in writing before we start discussions?
  • Will any fees for advice and other work be clearly explained before we start discussions?
  • Will you give me a signed recommendation explaining your advice?
  • Will I receive this recommendation several days before any meeting to discuss the recommendations?
  • What are the early exit charges related to any products you recommend?

Bogus IFAs scam expats

“Always ask for the responses to these questions in writing,” said a spokesman for Pension Life.

“If an adviser makes excuses or fails to provide the answers, then simply do not do business with them.”

Bogus IFAs must sell to earn commission, so the rogues recommend a product even if it’s not necessary for you to buy and are not clear about their business relationship with expats,” explained the spokesman.

“Losses of thousands of pounds are not uncommon and few expats get their money back,” she said.

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