From iExpats

Financial advisers feel overseas pension transfer rules need a shakeup, according to new research.

The survey by financial firm Old Mutual Wealth found almost 40% of international IFAs would welcome a review of offshore pension transfer regulations as they find the current set up too challenging.

One of the sticking points for international IFAs is switching a UK final salary pension to a Qualifying Recognised Overseas Pension Scheme (QROPS).

In April 2015, the Financial Conduct Authority (FCA) demanded that retirement savers transferring a final salary pension fund offshore should take independent advice from an IFA authorised by the FCA to manage such transactions.

This has seen an exodus of international IFAs linking with FCA regulated and authorised IFAs in the UK to review their QROPS advice to clients.

Call for QROPS transfer rules review

The measure stops unqualified overseas advisers from making pension transfers and gives retirement savers a regulated adviser to refer to should the transfer go wrong.

Old Mutual’s study revealed that 56% of international IFAs had problems with the requirement, mainly because clients were unwilling to pay an extra fee to an IFA to review the work already carried out by the international adviser.

Some international IFAs also have problems finding a UK IFA willing to review their work and take responsibility for the advice given to the client to transfer their final salary pension to a QROPS.

The report showed 69% of international IFAs had business links with a UK IFA, 14% have no link and 9% have decided to stop advising about offshore pension transfers due to the challenges they face from clients and UK IFAs.

As a result, 38% of international advisers would like the government to review the current arrangements, says the study.

Expats face pension transfer difficulties

Although a fifth of international advisers considered a review was not necessary, 42% had failed to make up their mind.

“This suggests a review is required,” said a spokesman for Old Mutual.

“We know the government is aware the arrangements may lead to practical problems for expats seeking an offshore pension transfer and that action may follow.

“A high number of international advisers seemed to have forged links with UK counterparts, but the number of advisers unhappy with the current rules is alarming.

“We also feel that clients should not suffer as a result of the rules.”

For more on this story go to: http://www.iexpats.com/ifas-face-offshore-pension-transfer-problems/