Concept Trustees Independent | Product Review

Gibraltar and Guernsey: Open architecture, but they disclaim responsibility for underlying advice to use Concept, or indeed the investments made.

As trustees, they allow commission-based bonds (not recommended), having a historic partnership with OMI (formerly Royal Skandia). There may be promotions for reduced fees for investing into a bond (still not recommended).

As trustees they allow greater flexibility than some UK trustees for investment. For example, they allow structured products and structured notes (probably not recommended for most retail clients with limited investment knowledge). They allow multiple investments even at retail level in unregulatedcollective investment schemes (UCIS) – but consideration should be given to whether these types of investments or increased investment flexibility is actually required. (Note 1)

Note 1 – Since 2013, the FCA have re-iterated to trustees in the UK, especially pension trustees, that products such as UCIS and most structured products are considered unsuitable for retail client investors. The FCA argue that UCIS are not understood by retail client as they have a risk of failure that retail investors may not understand. An offshore unregulated investment or structured product (that is not available to UK retail clients even if it originates from the UK) carries an even higher risk of this. At the time of this assessment, Concept confirmed to us (EME) that they would allow such investments as it was not the trustee’s ultimate responsibility but that of the investment advisers.

Concept Group (“Concept”) was established in June 2004. It is now an independent provider of innovative offshore financial solutions.

The Group Head Office is in Guernsey in the Channel Islands and currently employs approximately 50 staff. The business is owner managed, and has remained nimble and responsive to its clients’ needs whilst at the same time becoming a market leader in the design and provision of its solutions. It has continued to recruit to ensure its continued sales growth is underpinned by technical excellence and relevant experience.

You should be a retail client in order to consider a ROPS or QROPS product.

Guernsey- For consumers, the regulation in Guernsey provides some limited benefits. However, the regulator has no power to adjudicate in a dispute or to order a firm to put things right. There is a new Ombudsman (2016) that is theoretically able to adjudicate and, failing that, any dispute must be settled by contracting the services of a Guernsey advocate and the courts. We cannot comment on the new Ombudsman until there is a clear line of case judgements.

Gibraltar – Professional Trustee – For consumers, the regulation in Gibraltar provides limited benefits. There is no Ombudsman and the regulator does not mediate with clients’ complaints. Any dispute must be settled through the Gibraltar Courts – See our blog on Gibraltar Trustee Recourse.

Potentially expensive to transfer out of Concept. This is due to higher “Closure fees” compared with the UK, and potentially unpredictable fluctuations in value over a period of discussion with the company while they seek to discuss with clients options. In multiple cases, we have heard reports of intentional bias linked to Concept’s own product range, i.e. they suggest to professional advisers that they would offer clients who are attempting to move from Concept a more competitive solution if they move within their own product range, for example, from Guernsey to Gibraltar.

People wishing to place business into the hands of Concept and to ask them to act as trustees do so on the understanding that Concept trustees accept no responsibility for the underlying investments or risk. This could be deemed at odds when you consider that the trustees insist on conducting considerable due diligence on transfers away to other trustees or investment platforms, even UK FCA regulated platforms. We should add that this is a lawful position, although in our view it is not a fair one. As part of the Concept Trustees independent review we have to state that it may not be necessary to take additional costs and regulatory risk given what else is available in the market.

It is in any case unclear to us why there should be more due diligence and apparent concern over a transfer of funds away from Concept trustees than when they initially accept business as trustees, for example, through an offshore bond wrapper investing into structured products or UCIS. We regard this is as simply protectionist behaviour.

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