Last Updated on 6th September 2024
Chase Buchanan’s network of offices led and staffed by our highly accomplished teams of tax specialists, financial advisers, and private wealth managers, often speak with new clients who need absolute assurance that the guidance they receive—whether to manage their investments, international tax exposure, or retirement wealth—is accurate and reliable.
While hiring an Independent Financial Adviser in any country should theoretically offer this level of assurance, the reality is that standards, qualifications, experience and degrees of independence vary significantly between countries.
We’ve explored in previous guides how an adviser who purports to be independent in one jurisdiction might, in fact, work exclusively for one bank – but remains adherent to regulations in using this word within their job title.
We’re looking at a slightly different angle and exploring whether an Independent Financial Adviser (IFA) based in the UK and with British accreditation can offer the degree of professional financial advice an expat requires – and why the answer is that it depends.
Are UK-Based Independent Financial Advisers Permitted to Advise Overseas Clients?
We’ll start with the basics: In the UK, the IFA qualification doesn’t necessarily infer that a professional adviser is an expert in every area of financial management. Nor does it always mean they are 100% independent and offer unbiased guidance based solely on your objectives.
There are distinctions to be aware of:
- Restricted advisers can work in personal finance but have one specific area of knowledge or offer products from one or a select number of banks or financial institutions.
- Non-restricted advisers often call themselves ‘whole-of-market’ because they can suggest any product or fund from any bank or institution they believe is in your interests.
Both types of advisers are Financial Conduct Authority (FCA) regulated and are professionally bound to offer objective advice, but they provide very different scopes of service. Neither, importantly, are authorised to provide advice related to matters outside of the UK, since this is the only jurisdiction in which UK regulations, consumer protection and ombudsman services apply.
Many expats seeking financial advice ahead of an international move may also need to clarify the role of the FCA, as the UK regulatory body, in any services they use before their relocation.
The FCA and Financial Services Regulations for Expat Clients
Since the FCA is a UK regulatory organisation, it has limited powers or remit in any other country. Although the regulator often confers with the equivalent legislators in the EU around baseline consumer protection standards, it rarely has involvement with matters in a different country since the regulations and rules will differ.
For most expats, the only scenario in which the FCA gets involved is pension transfers, where an expat is transferring a pension fund from the UK into an overseas scheme, such as a Recognised Overseas Pension Scheme (ROPS).
In this case, the UK regulations state that any pension scheme or trustee dealing with an individual requesting a pension transfer worth £30,000 or more must verify that they have sought independent financial advice before proceeding. This rule applies to any UK-based pension transfer, regardless of whether the fund holder lives in Britain or elsewhere.
Otherwise, the FCA has little or no involvement in financial products or complaints if they relate to an overseas financial product or account, a service delivered by an entity in another jurisdiction, or are linked to the financial affairs of an expat who is a tax resident elsewhere.
Therefore, if a British citizen makes decisions around their financial affairs based on guidance from a UK IFA, which has a detrimental outcome, they have no recourse to file a complaint with the ombudsman or seek reparations for the damage caused.
Previous rules around ‘passporting’ also no longer apply, following the departure of the UK from the EU, although firms registered within the European Economic Area (EEA) are permitted to trade in any jurisdiction without authorisation from any other member country.
Why Does the Location of an Expat Financial Adviser Matter?
The key factor when sourcing financial advice is to ensure that any adviser you deal with has the knowledge, ability, and capacity to offer you personalised guidance based on a wholly independent and tailored assessment of your current position, aspirations, and requirements.
Although a minority of fully independent IFAs may have studied tax law in another country or focus their services on pension transfers, it is unlikely they will have the necessary proficiency in every intricacy of tax planning in both the UK and another country to advise on any and all affairs. These might relate to:
- Wealth taxes
- Income and corporate tax planning
- Cross-border investment
- International capital gains tax
- Overseas succession law and inheritance tax
- Private life insurance and critical illness cover
- Tax residency analysis
- Complex pension transfers
- Ongoing wealth management support
Part of the reason we’d suggest you consult a specialist expatriate wealth manager is that even an experienced UK-based IFA cannot offer financial advice related to matters outside of the UK. Pre-relocation guidance around the best ways to manage your current assets, investments or savings products would also be unprotected, unregulated, and depend on a potentially minimal understanding of the tax landscape or regulatory environment in your new country of residence.
On-the-ground financial advisers and wealth managers, instead, know every intricacy of the local tax system, the types of exemptions and allowances that exist, the rules around transferring funds, pensions or investments into the relevant country, and the thresholds and caps that could impact your tax planning.
How to Find Reliable, Expert Financial Advice Overseas in English
A common problem for expatriates, particularly those planning a relocation for the first time or just beginning to settle into their new home country, is that, inevitably, most localised services are delivered in the native language – and translations into English are far from dependable.
We are all familiar with how automated translations tend to be approximate, and we do not recommend that anyone rely on this level of accuracy to make important decisions about their finances and tax management.
However, it is equally crucial to avoid making assumptions about a financial adviser’s accreditations, reputation or ability in any country simply because they produce information and communications in English.
Relying on English-speaking services without paying attention to other background checks can expose you to fraudulent activities or substandard, unregulated advice that is less dependable than that delivered in a non-fluent language.
Our suggestion, as always, is to speak with a member of the global Chase Buchanan network. Local, fully qualified, and multilingual advisers are accustomed to supporting clients from around the world and are accredited, regulated, and insured across the board.
We offer comprehensive services to support expat clients throughout Europe and North America, bringing together experts at the top of their fields in managing tax, investments, pensions, inheritance and insurance, providing long-term support to ensure our clients make informed, timely decisions at every stage of life.
If you’re concerned about the quality of advice you have received, are unsure whether an adviser has the appropriate knowledge to assist or need the confidence that your adviser has the independence and skills to offer truly valuable advice, please get in touch with your nearest Chase Buchanan team at your convenience.
*Information correct as at June 2024