The Offshore Independent Adviser

Offshore Independent Adviser

UK expats often need to consult with an Offshore Independent Adviser often known as an Independent Financial Adviser (IFA), but what does the term really mean?

A recent conversation with an offshore compliance officer seemed to suggest there could be more than one definition of an offshore independent adviser.

Is an Independent Adviser a myth offshore?

Probably, yes! How do I come to this conclusion and justify it. To me, and others, it is clear there is only one legal definition of what an IFA is, and only one place in the world where it is legally enforced. However, outside of the UK there is another interpretation of offshore independent adviser and people can call themselves what they like in many countries and there is no legal basis or enforcement of what the name is that is used, e.g. independent.

UK perspective

Since this blog is aimed at British expats, I think the ethos of an IFA from the UK is obvious to all expats, i.e. totally impartial, communicated as such with some form of regulation. Offshore Independent Adviser rides on the premise of this ethos and would suggest similar standards and qualifications. But no, it is not, as outside of the UK in much of the world there is no regulation or legal enforcement of the term IFA or who can be an offshore independent adviser.


Let’s look at how the UK FCA  (link here) define an IFA. 

In order to call yourself an independent financial adviser, you need to provide unbiased and unrestricted advice based on a comprehensive and fair analysis of the market. Genuinely independent advice is free from any restrictions that could affect advisers’ ability to recommend what is best for the customer.  You need to be able consider all retail investment products

Restricted Advice.

The FCA also provide a definition of restricted advice ( ie not totally independent )

If your firm only gives advice on certain types of product, or on products from one or a limited number of providers, you must describe your advice as ‘restricted’.  You must tell customers that you provide restricted advice and how it is restricted – by product or by provider. You must do this in writing and also verbally before you give the customer any advice.


Therefore, to be truly independent a firm must be able to advise on all suitable types of investment product and, to do that, an offshore independent financial adviser needs to have an appropriate licence from a regulator.

However, it seems that those firms that have only a licence to sell insurance products can refer to themselves as offshore independent financial advisers – if not in the UK.

Clearly, with only a handful of offshore insurance firms able to cater for expats, isn’t there a parallel with Henry Ford’s comment in 1923 ? “Any customer can have a car painted any colour that he wants, so long as it is black”

Overseas definition of an Offshore independent adviser

Firms with the more rigorous investment licences, and who are able to advise on the whole market, are also referred to as offshore independent financial advisers. How is the public to differentiate?

What should expats look out for?

Before engaging an offshore financial adviser, ensure that the adviser has more than just a licence to sell costly, and commission laden, insurance products.

If the advisers do not have an investment licence but call themselves independent financial advisers ask them why they do not state clearly that their advice is as independent as the limited range of products they are allowed to sell will be linked to insurance and investment bonds.

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.



Chris Lean

Chris is a Chartered Financial Planner who writes blogs and articles to simplify and explain some of the financial issues that affect UK expats. Subjects include; hot topics, regulation and the ever-changing world of finance.

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