The fight against pensions transfer and liberation companies must go international, Geraint Davies has claimed.
The managing director of Surrey-based financial planner Montfort International said an abundance of pension advisers passporting into the UK from territories with less stringent controls could cause significant consumer detriment.
He said the misuse of Qualifying Recognised Overseas Pensions Schemes had contributed to the problem.
Mr Davies added: “Many of these advisers are registered in countries whose standards of pension advice are much lower than in the UK, and are not subject to the same due diligence or training requirements.
“I have heard of some who go on two-day courses and are then advising clients, persuading them to transfer into Qrops based in places such as Spain, Gibraltar, Portugal and Cyprus, with many investing in unsuitable and high-risk vehicles.
“Others are even more unscrupulous, linking the transfers to non-existent pension schemes. So many are jumping on this pension transfer bandwagon that the recent action to tackle pension transfer firms is just scratching the surface.
“These firms are becoming so big that no one is policing them. Who do you complain to? If you go to the HM Revenue & Customs it will say your pension has been liberated, which incurs a hefty charge.
“The Financial Conduct Authority will say that as the advisers are based overseas, they are not subject to its authority.”
He said that advice on Qrops should take into consideration local jurisdictional social security, taxation and migration issues, such as visas.
A spokesman for the FCA said that for a branch, Cobs rules will generally apply, but added there is scope for different application of rules depending on the circumstances involved.
“However, fewer rules apply if the adviser is passporting in on a services basis. Territorial application is very complex, so it is not possible to give a simple answer.”
Industry view Ollie Clymo, associate for London-based pensions consultant Barnett Waddingham, called for an “urgent change” in the law to allow pension trustees to block transfers to suspected pension liberation schemes. He said The Pensions Regulator had encouraged trustees to stop members from transferring their funds but no powers existed to help them. He also called for regulator to publish a list of liberation schemes under investigation in a similar way to the FCA. A spokesman for regulator said it was “keeping an open mind” on what further action it may take. |