QROPS problems for UK advisers
Following the numerous changes to UK pensions set out in this year’s Budget, there’s another pension-related issue that is beginning to dominate the industry. It is the subject of UK-based IFAs having to include advice on QROPS, or not.
There’s much controversy and a good deal of confusion, it would seem, on this.
It has arisen following reports that the Financial Ombudsman Service (FOS) in the UK has declared a ruling against an IFA for not informing a client about QROPS. In order to be classed as ‘independent,’ financial advisers are required to present clients with the complete range of advice, which should, where appropriate, include advice on QROPS (Qualifying Recognised Overseas Pension Schemes). If this isn’t the case, then the financial advisers are classed as ‘restricted’.
Although this report hasn’t been confirmed, the industry’s rumour mill has gone into overdrive. There have also been suggestions recently that the Financial Conduct Authority (FCA) is issuing a series of rules regarding QROPS advice, in a similar way in which pensions advice is given and regulated within the UK.
So, why has this come to a head now?
I believe that, to a large extent, it’s because QROPS have now become so mainstream. As such, it comes as no surprise to me that IFAs based in the UK are being held to account for not discussing QROPS to those leaving the UK.
To my mind, the fact that the FOS could be reprimanding advisers for not including QROPS, where it is appropriate to do so, is further evidence of the maturing market.
I have always advocated attempts by the likes of the FOS, the FCA and HMRC to make the QROPS market more robust, and the introduction of consistent rules on the issue of UK-based IFAs and QROPS would, I am confident, be welcomed by all stakeholders. This is especially true as demand for QROPS continues to increase, as it has done every year since they were launched in April 2006.
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Mike Coady is an award-winning financial expert and a well-known leader in the financial industry.
Having taken two of his previous firms to Chartered Status in the UK and also achieved the prestigious National IFA of the Year Award – Highly Commended.
Mike is qualified to UK Financial Conduct Authority (FCA) standards, a member of the Chartered Insurance Institute, a Fellow of the Institute of Sales Management (FISM), and a Fellow of the Institute of Directors (FIoD).
Blog published by Mike Coady