Expats can find pension advice from a range of people saying they are financial advisers – but picking the professional from the scammer can be difficult.
A media outlet for independent financial advisers has recently run a checklist for IFAs to answer to see if they have what it takes to give the right Qualifying Recognised Overseas Pension Scheme (QROPS) retirement advice to expats.
As a bit of fun, the questions have been flipped for expats to ask the IFA, but this is a serious topic for anyone about to hand their life savings to a stranger
Are you a QROPS specialist?
Make inquiries about the firm’s knowledge and experience in the market – not just how many transfer they complete but who offers offshore tax, estate planning and investment advice
Where do your clients live?
The IFA should not be country centric, but should belong to an international organisation that is local and available if you move and need ongoing advice
What are the IFA’s qualifications?
Local regulators handle pension advice, even in Europe, where ‘passporting’ qualifications and licences is allowed. Check the IFA’s registration personally by phone or email with the regulator
Do you have professional indemnity cover?
Take a copy and ring the provider to make sure. Some foreign advisers spoof the system by paying the first month’s premium to get a certificate and then default, so they look like they have indemnity cover but do not really
Check the cover applies to the advice the IFA is giving and to the country where you are based
How do I contact you?
Some IFAs work out of their suitcase and smartphone, keeping on the move. You want a reliable and accessible professional handling probably your most valuable investment
Do you offer whole of the market advice?
This is important. You do not want advice related to a specific country or provider, but the best product on the market that is bespoke to your personal circumstances
Can you prove where I am resident for tax?
An important point that should be one of the first points discussed as only non-UK residents or overseas workers with a UK pension pot can open a QROPS.
Other important questions involve your family, where you intend to retire and if you are likely to move countries between now and retirement.
All these factors can impact QROPS tax and investments.
QROPS offer expats several tax efficient benefits, but can also open the door on tax traps and estate planning problems. Finding the right IFA is crucial and if in doubt, walk away and find someone else.