For advisers seeking to specialise or branch out into advising expatriates and those living or working overseas temporarily, the market can be exciting but it needs careful planning.
Each year, employment opportunities tempt British talent to go and work abroad, from Dubai to Singapore and to New York. Similarly, the lure of sunshine in winter continues to draw people from Britain to retire in warmer climes such as Spain, Portugal and Australia.
According to Blevins Franks, some of the most promising pension regimes in Europe are Malta and Gibraltar, which were given UK government and FCA approval in June 2015, when they escaped the purge of HMRC-qualifying Qrops jurisdictions, as a previous article in this guide explains.
The fact these are in the EU, subject to strict regulations, English-speaking and with established banking and trust sectors, makes these countries particularly attractive. However, they are not that popular in terms of total migration: official statistics place Australia, Spain, the US and Canada as the top four on the list.
But breaking into any these markets necessitates a long-term plan and careful attention to local, domestic and regional regulations, taxation, product permissions and the qualifications needed to advise people across the world.
Getting this right can be costly for firms, as Jason Porter, director for Blevins Franks, says: “This has become an area of advice that demands considerable capital investment in order to get it right, both from a UK and a local jurisdiction, and in particular the interaction between the two.
“Newcomers entering this sector will see considerable barriers to entry. The cost of initial and ongoing authorisation will be high, compared to an adviser only serving UK resident clients.
“There will also be costs in terms of the knowledge levels required of the specialist individuals.”
Some firms opt for buying the expertise; in June 2014, London-headquarted St James’s Place bought 50-strong intermediary buiness in Asia. The purchase of the Henley Group, now called St. James’s Place Wealth Management – Asia, operates out of Hong Kong, Shanghai and Singapore, and has marked SJP’s push into the overseas expat advice market.
There are also international and Europe-wide networks that can help provide help with compliance and regulation and training in international matters.
Some firms may not want to buy or join a network, but prefer to create partnerships or forge relationships with overseas advisers. Paul Stanfield, chief executive of the Federation of European IFAs, says: “We generally find that working with a good quality, appropriately regulated adviser based in the client’s new country is often the best way to ensure that good and relevant advice is delivered.
“In Europe, FEIFA often assists UK advisers to create relationships with member companies across the region.”
However, it is imperative to do all the proper checks before entering into any form of partnership with overseas firms. The Financial Conduct Authority has taken enforcement action in recent years against firms which have not done appropriate due diligence when it comes to overseas introducers.