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Abu Dhabi, UAESunday 16 December 2018

Holborn Assets makes controversial FCA pension claim 

The financial advisory company's UK division was ordered to stop pension transfers in March, but it says it can now resume advising clients if it uses third parties for transfers

Bob Parker, the chief executive of Holborn Assets, said the key to moving forward was appointing an external firm "to sign off all advice". Photo: Holborn Assets
Bob Parker, the chief executive of Holborn Assets, said the key to moving forward was appointing an external firm "to sign off all advice". Photo: Holborn Assets

The UAE-based Holborn Assets was mired in controversy on Thursday after stating it is resuming its pension transfer advice in the UK despite a statement on the Financial Conduct Authority’s (FCA) disputing their claim.

While the FCA's website confirms that Holborn Assets can resume business in the UK, the Dubai-based financial advisory firm must still refrain from offering guidance to its clients on defined benefit (DB) pension transfers.

According to notice on the UK regulator's website, which recently replaced an earlier posting, under section 55L of the Financial Services and Markets Act (2000), the firm must: “cease all regulated activity relating to pension transfer business until independent verification via a Skilled Person is provided to the FCA that a robust and compliant advisory process is in place in respect of the pension transfer business introduced by overseas advisers”.

The notice added that the firm must “undertake a past business review of all pension transfer business, including business introduced by overseas and UK advisers".

Holborn Assets, however, refuted the FCA statement and claimed the restriction, which was first put in place in March, had been lifted after recruiting an external consultancy to sign off on any advice it provides.

“As of today, these restrictions are no longer in play and will be removed from the website shortly,” said Bob Parker, the chief executive of Holborn Assets told The National. "The key to moving forward is the appointment of an external FCA-approved consultancy firm to sign off all advice.”

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Read more:

FCA crackdowns on Holborn Assets’ UK division over pension transfers

DeVere unit stops assisting on UK pension transfers overseas

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Holborn Assets was among a number of international financial advisory firms caught in a UK regulatory crackdown on pension transfers earlier this year.

In February, the UK arm of the international financial advisory firm deVere Group was also ordered to stop providing reports for overseas pension transfers by the FCA.

At the time of the Holborn ban in March, Mr Parker said the FCA had no UAE jurisdiction and that the company would continue transferring pensions and performing other services for its expat customers in the Emirates.

Holborn said its UAE operations were "at no point told to cease providing advice for pension transfers or completing pension transfers. Holborn UK was told it simply could not approve those transfers". Holborn said it would use a third party for this.

"We were already using this system – we just had to employ it for all pension transfer work," it said.

Holborn Assets, a family owned and operated financial services group, launched in the Emirates 20 years ago and has offices in both the UK and also South Africa.

DB pension transfers have been heavily monitored by the FCA, which earlier this year warned expats to be wary of schemes offered by local advisers, such as those based in the UAE, that in many cases then put them into high-risk investments not suitable for pension money.

Sam Instone, the chief executive of AES International said that a transfer out of a defined benefit pension scheme is a major decision.

“It is imperative that an individual seeks independent advice from both a firm and individual who hold the specialist permissions and qualifications to advise on such complex transfers. The only place to confirm this is the permissions section of the FCA Register,” he added

"This advice must be taken on a transparent fee-basis from a properly authorised adviser. Too often, unauthorised firms and advisers outside of the UK use commission-laden and opaque structures to persuade unsuspecting expatriates to transfer pension rights without regard to the potentially catastrophic risks involved.”