International IFAs are grumbling about Qualifying Recognised Overseas Pension Scheme (QROPS) rule changes that mean some transfers take up to six months.
The new rules require a UK regulated IFA to review offshore IFA advice to expats transferring final salary pensions to QROPS.
They are complaining that the rule means pensions transfers are slowed down – and some are taking up to six months to pass paperwork hurdles when other QROPS transfers take around 12 weeks.
IFAs are also complaining the rules mean some expats are finding regulated and qualified advice hard to find.
In 2015, the Financial Conduct Authority (FCA) ordered that all final salary QROPS transfers from the UK to a QROPS should be double checked by a regulated onshore IFA to confirm recommendations for the switch were best advice for retirement savers.
Finding a qualified QROPS advisor
The FCA argues that in many cases retirement savers could lose valuable pension benefits when they switch schemes.
Introducing the UK adviser in to the transfer process adds time and costs into the QROPS transfer process.
However, when a UK IFA is involved in the transfer, the client is protected by the UK financial ombudsman service if any complaints arise and can make claims against the UK IFA’s professional indemnity insurance for compensation.
Although two-thirds of international IFAs now have tie-ups with an appropriately qualified UK IFA to meet the FCA rules, that leaves a large number of international IFAs who are not authorised to manage QROPS transfers.
Many international IFA firms have FCA regulated and authorised IFAs on board already who can carry out the extra work involved in a final salary pension QROPS transfer.
Double layer of IFA advice
Taking QROPS advice from one of these firms is likely to prove easier and quicker for anyone contemplating a QROPS transfer.
The FCA introduced the extra band of advice as a belt-and-braces option not only to aid consumers, but to make life harder for rogue international IFAs.
These IFAs plague expats seeking solid financial advice in some countries – especially Spain and Thailand.
Financial firm Old Mutual argues the UK government should review QROPS transfer rules to help expats gain the right pension advice.