New QROPS rules from 1 July will impact advice
6 May 2019
Advice firms must ensure they can continue to service existing or new clients who have transferred their pension overseas ahead of new rules coming into force this summer, deVere Group has warned.
The Malta Financial Services Authority will introduce new pension rules in Malta impacting the way in which pension trustees administer both new scheme applications and existing members.
Malta is a popular jurisdiction for many pension savers wishing to take advantage of the considerable financial benefits of transferring their UK pensions outside of the UK. Around 30,000 UK pensions have already been transferred into Malta-based Qualifying Recognised Overseas Pensions Schemes.
Coming into effect on 1 July, deVere says the rules will have a “major impact” on how advice and service is given to those with Malta-based QROPS. Under the tougher new regulations, which are designed to enhance client protections, it will no longer be sufficient for the adviser to only be licensed. The licence must also allow the adviser to provide investment advice to the member and they must be regulated in the jurisdiction where the client is based.
James Green, deVere’s division manager of western Europe, commented: “It is highly likely that many advisory companies will be unable to meet some or all of the stringent new regulations and therefore, will not be able to service new or existing clients in this area. As such, I urge all retirees to check that their adviser is able to fulfill their obligations in accordance with the sweeping rules changes.”
In response to the rule changes, deVere said it has worked with each of the Malta trustees to ensure that it continues to comply with the regulatory changes.
Green added: “For expats or for those who are planning to retire abroad, QROPS – with all their significant associated benefits such as a choice of currency, succession planning advantages, greater investment flexibility and pension consolidation – remain an important solution to help them reach their long-term financial goals.
“The Malta regulator’s forward-thinking approach serves to further strengthen their appeal even more.”
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