The Federation of European Independent Financial Advisers

Expat retirement transfers have the potential to play a critical, and beneficial, part of an expat’s financial planning. However, this is only if the process is undertaken in a considered fashion with reliable, regulated and trustworthy advice that investigates all of the options, including the possibility of a QROPS or SIPPs transfer.

The Financial Conduct Authority (FCA) knows this better than anybody and has recently flagged its concern that too many firms are providing unsuitable pension transfer advice. This followed the publishing of a report in which the FCA found less than half of all pension transfer advice was fit for purpose.

Pensions Advice: Good – Pensions Transfer Advice: Bad

The FCA examined the retirement transfer advice of 18 firms and although it conceded that its analysis was not representative of the whole market, it stated that the findings were indicative of a market in which advice may sometimes fall short of an acceptable standard.

“Our assessing suitability review in 2017 showed that around 90 per cent of advice on pensions and investments was suitable,” commented an FCA spokesperson, adding that it was “unacceptable” that advice given specifically on pension transfers “should persistently remain at such a low level in comparison to investment advice. We expect firms to take prompt action on our findings and to check that their business model and advice processes do not exhibit similar failings.”

The truth is that for many clients, particularly those who reside in the UK, there may be little to no benefit in switching from a Defined Benefit Scheme; in the case of an expat, an expat retirement transfer is more likely to be suitable, although of course, what is suitable for the client entirely depends on their circumstances and long-term financial goals.

Furthermore, the FCA advised that making a retirement transfer should never be considered as the default position for a financial advice firm, adding that those which failed to review or amend their business models in light of the concerns would face serious consequences.”

 

​​​​​​​​​The above article was kindly provided by Blacktower Financial Management Group and originally posted at: ​​​​​​​​​​​https:///www.blacktowerfm.com/news/649-suitability-key-when-looking-at-expat-retirement-transfer