What should you be considering with regard to Financial Advice after Brexit – Blevins Franks makes some good points
When you are receiving financial advice after Brexit – Blevins Franks has suggested consumers should check who is providing their investment and pension advice;
the basic concept is those consumers that are now resident in France, who may have taken financial advice from UK and Gibraltar regulated advice firms, usually to British expats, cannot do so moving forward.
Some firms should not be giving advice if they are not regulated to do so in France. Although the same could be argued in Spain or other EU territories.
One of our clients, in France, was listening to the radio and said,
“Driving through France listening to Riviera radio (aimed at British expats) I heard a Blevins Franks advert about checking your IFA to see if a UK firm can still give advice on your investments and pensions after Brexit. Is that true?“
The answer is “Yes and No!”
Let us consider a typical overseas pension, say a French pension. We would not recommend that a UK regulated adviser deal with this but should refer back to a regulated adviser in France. In fact, you need a French adviser with French terms of business with the appropriate regulated company.
Is that not the same in reverse, post-Brexit, as you need a UK adviser with UK terms of business with the appropriate regulated company for a UK pension?
The answer is “Yes and No!”
Under EU rules, pensions are a national regulation (they are specifically excluded under MiFID) and pensions in the UK are regarded as regulated investments not under MiFID.
Financial Advice after Brexit -Why is this an issue?
So, bottom line, there is no EU law stopping UK firms from still managing UK pension investments in the EU. However, we would recommend advice be provided alongside a tax adviser in France (or another regulated French adviser for the French aspects).
Indeed, the FCA have in October 2020 said that they continue to expect that UK regulated firms will give specialist advice (such as Defined benefit final salary) for residents of overseas territories, such as France.
Actually, a UK firm can give advice on British regulated products at arms-length to anyone in the world wherever they live, but we always recommend a team philosophy and state we do not provide tax advice at a local level.
So, whilst it is a good point that Blevins Franks make, the real issue is that actually it goes both ways. Can your local French regulated IFA still give advice about British regulated products after Brexit?
The answer is “Yes and No!”
If the French adviser is regulated in France they cannot passport into the UK, and absolutely should not be giving advice on UK products (even if they are British expats themselves).
When it comes to financial advice after Brexit – Blevins Franks therefore has a very valid point about other firms operating in France who have no British FCA licence. For example, if they do not hold a terms of business with the regulated pension company, are not regulated in the UK then they should not be attempting to advise on the UK product. Clearly, this is a problem for you as a French resident if you want your UK pension managed by someone authorised and regulated to do so in the country you live in, like France.
Tailormade Pensions and Brexit
Tailormade is regulated in the UK and other EU jurisdictions and so will be able to provide financial advice after Brexit for EU residents- as usual, to the same high UK standards backed by Chartered Financial Planners. Not only that, one of our sister companies is regulated in France.
Our concern about abuse of Financial Advice after Brexit
Our concern is that such people may be sold the idea of moving their british pensions ( and other investments) from the UK to an expensive offshore pension in Malta where the investments are then placed into a costly offshore insurance bond. Increased costs and fees, often not disclosed, will have a detrimental effect on your retirement income.
None of this was necessary, and there was no tax advantage, and Brexit is being used as weapon against consumer best outcomes.
Summary – Financial Advice after Brexit – Blevins Franks
If you are receiving advice from a firm using EU passporting from the UK or Gibraltar, make sure that they have put in plans to ensure EU licences will be in place to provide an ongoing service.
As things stand, the ability to ‘passport’ services into the EU under Gibraltar and UK licences will come to an end. But this is an EU law, and the whole point is that the UK will no longer be part of the EU.
Changing adviser or a new overseas adviser in France
If you have to change adviser, be wary of any recommendation to switch to a QROPS with an insurance bond and always ask for the KIID (Key Investor Information Documents) to ensure you can see the real costs of the recommended investments.
Avoid any with an initial fee (commission) and any with a high ongoing fee(especially if this fee is over 1% pa(commission again). We have come across numerous cases where the KIIDs are not issued and we all know why!
Finally, some advisers in the EU claim to be ‘independent’, yet have lucrative and exclusive deals with some insurance and investment companies. Do your research.
Financial Advice after Brexit – Blevins Franks raised a really good point with their radio adverts and we commend them.
End of article: What should you be considering with regard to Financial Advice after Brexit – Blevins Franks makes some good points
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 20 Nov 2020
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