The best QROPS providers- how should they be assessed by clients and IFAs?
While many of our blogs focus on the benefits of UK pensions, and the myths and facts of QROPS, we have not discussed the QROPS trustees. How can we identify the best QROPS providers? This blog looks to rectify this and hopefully help those considering a QROPS as part of their retirement planning.
What should differentiate the best QROPS providers from the rest? Is it cost, good service or is it something else
We would argue that a study of the duties of trustees would be a good starting point for any due diligence. We have all read reports on forums, and in the press, where questions have been raised about some QROPS providers perhaps not adhering to the standards they should and perhaps the effect is to tar the best QROPS providers with the same brush.
The problem is that it seems that some QROPS trustees are often inexperienced or established in locations with less than stringent regulation and low enforcement. They are often the cheapest and so their offering is probably not going to be the most robust. Low price here does not equate to value.
Rather than providing our views, we thought we would ask a QROPS trustee for an opinion on what IFAs should be looking for in a QROPS provider. Indeed, we thought we would go to a leading industry expert for his views.
TMF Pensions
Bethell Codrington is head of International Pensions at TMF and is also Chairman of the Malta Associaton of Retirement Scheme Practioners.
He provided us with a checklist that he would expect the best QROPS providers to adhere to, namely;
- Be regulated to provide pension trustee and administration services
- Operate only in countries that have a pensions act and have a regulator that regulates their activities
- Have sufficient PI cover
- Only deal with advisers who are regulated to give pensions advice
- Only deal with advisers regarding underlying investments who are specifically regulated to give investment advice
- Disclose all their own fees and commissions, and all fees and commissions paid to third parties and introducers from any source
- Take their fiduciary responsibility seriously and duty of care
- Know their subject and the regulations in both UK and country of product
- Be prepared to turn away unsuitable business
Not only would such a checklist go a long way to ensure that the retirement funds of the clients are protected, it is surely a checklist for good business practice.
Who are the best QROPS providers?
The truth is that is determined by the clients’ requirements and location. We are independent and as such we look to the whole of market for each client. We also want to state that a QROPS is not the right solution for every client, something that Bethell Codrington totally agrees with, but not all offshore trustees accept this and will accept new clients when common sense would dictate this is not in the clients’ best interests. Remember, a trustee has a duty of care to the beneficiary and a trust is not simply the sale of a product, it should be a financial solution.
Summary
If a QROPS is deemed to be the appropriate advice, given by a properly qualified and regulated IFA , then the best QROPS providers that adhere to high levels of fiduciary responsibility will provide the expat client with the best solution to securing a happy retirement. As independent advisers we seek the right solution for each client individually.
The views expressed in this article are not to be construed as personal advice. You should contact a qualified and ideally regulated adviser in order to obtain up to date personal advice with regard to your own personal circumstances. If you do not then you are acting under your own authority and deemed “execution only”. The author does not except any liability for people acting without personalised advice, who base a decision on views expressed in this generic article. Where this article is dated then it is based on legislation as of the date. Legislation changes but articles are rarely updated, although sometimes a new article is written; so, please check for later articles or changes in legislation on official government websites, as this article should not be relied on in isolation.
This article was published on 16th February 2017
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