DeVere unit stops assisting on UK pension transfers overseas
The UK arm of the international financial advisory firm deVere Group has stopped providing reports for overseas pension transfers.
UK watchdog the Financial Conduct Authority (FCA) has published a notice on its website saying the consultancy had agreed to cease operations in this area.
The notice said deVere and Partners (UK) Ltd must: “Immediately cease to provide third party companies with transfer value analysis (TVAS) … or other similar reports of information designed to assist third party companies in transferring customers’ defined benefit (DB) pensions to an alternative arrangement.”
A spokesman for deVere and Partners (UK) said the consultancy had initiated contact with the FCA, as it looked to comply with new regulatory requirements when working with cross-border clients. “DeVere UK wrote directly to the FCA on this matter and this resulted in a meeting. The firm, recognising the FCA wanted to strengthen procedures, entered into a voluntary requirement to cease providing advice in the provision of TVAS reports.”
He said deVere would continue to work alongside the FCA’s appointed independent body through Section 166, which allows the UK regulator to appoint a third party “skilled person” to investigate concerns about aspects of a regulated firm’s activities. “As one of the sector’s leading providers of overseas pension transfers to international clients, we fully support and welcome this review.”
The deVere spokesman added that no advice or information had been provided to any other third party company. “We are confident that there has been no detriment to clients, and there have been no client complaints. Working with the FCA, we have taken decisive steps to ensure our clients’ best interests have been served.”
The notice applies only to deVere and Partners (UK), and does not affect deVere Group’s UAE operations such as PIC or Acuma.
The National contacted the FCA for comment but was told that it would not comment on individual companies.
The wider issue of overseas pension transfers has become increasingly controversial, with many UAE-based advisers recommending that British expats shift money out of their UK defined benefit final salary workplace schemes, and into offshore savings and investment plans.
Advisers often charge high upfront indemnity commission for doing so, and have been accused of putting some investors into unsuitable and costly plans.
The UAE’s Insurance Authority recently announced that it would change how savings, investment and life insurance policies are sold, in response to what it called “an alarming amount of complaints” from policyholders.
Steve Cronin, 38, the founder of Wealth, Investment and Saving for Expats (Wise), an independent community providing financial education and support in the UAE, welcomed the move towards tighter regulation, globally and in the UAE. “There is a long way to go and UAE expats and residents need to remain on their guard and examine any overseas pension transfer or offshore investment scheme carefully before signing up.”
Mr Cronin expressed disappointment that the Insurance Authority has pushed back its reform timetable by two years. “This is a shame as I would like to see new regulations coming into place as soon as possible.”
Last week, the FCA issued a statement saying that it was looking to crack down on domestic and international pension transfers, over scam fears.
One UAE adviser, who asked not to be named, said it was good news that the UK regulator was also cracking down on international pension transfers: “The Financial Conduct Authority will not be bullied into turning a blind eye to any mis-selling practices.”
Geraint Davies, the managing director at Montfort International, FCA-regulated advisers in international pension transfers and taxation, has warned that some of the processes for final salary advice for Britons with non-UK issues ignore cross-border tax considerations and can be embarrassingly substandard. “Regulators in my opinion should review this market space,” he said.
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Updated: February 4, 2017 04:00 AM