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International Advisers Face Challenges With Overseas Pension Transfers

13/01/2016

According to the latest research* by Old Mutual International, 38% of international advisers who carry out pension transfer business believe a review of the new rules is required in light of numerous challenges. Just 20% of advisers did not think a review was required and the remaining 42% of advisers were not sure. This suggests there would be widespread support for a review of overseas pension transfers by the Department for Work and Pensions (DWP).

 

Under the new rules, introduced in April 2015, final salary** pension transfers must receive ‘appropriate independent advice’ from someone who is authorised by the UK Financial Conduct Authority (FCA) to carry out pension transfer business. This has led to a number of overseas advisers linking up with advisers in the UK for their pension transfer business. The UK adviser will be the person responsible for the pension advice.

 

The research shows the majority (56%) of those international advisers who advise on pension transfer business have faced challenges under the new requirements. The biggest challenge was clients not wanting to pay an additional fee to a UK adviser. Another challenge was not having links with any UK adviser firms. International advisers also raised concerns over liability and who would be to blame if things went wrong.

 

The research shows that 69% of international advisers have successfully linked up with UK advisers. This figure includes a mix of those who do (28%) and those who do not (41%) have a business connection with the firm they have linked with (for instance they may be part of the same group). 14% of advisers have not found a UK adviser firm to link with yet but will keep looking. 9% of advisers have decided to stop writing this type of business.

 

The DWP is aware that the requirement to take advice from an FCA-authorised adviser may create practical difficulties to people who are now living overseas. The DWP will consider what further action is required following the outcome of the Financial Advice Markets Review, which will consider what can be done to improve access to advice at affordable levels.

 

Jon Greer, pensions technical manager at Old Mutual Wealth, comments:

 

“The research is an interesting insight into how advisers are feeling now the new pension transfer requirements have been introduced. A surprisingly high number of overseas advisers have already successfully linked up with UK adviser firms but the number of advisers who have faced challenges is alarming. It is imperative that clients are not detrimentally impacted, so we would welcome a review by the Department for Work and Pensions.”

 

* Research: International adviser survey Q4 2015, survey closed 21 October 2015, 289 advisers completed the survey from a number of jurisdictions, including UK, Europe, Asia, Middle East and Africa.

 

** The advice requirement applies to individuals with a UK defined benefit registered pension scheme (RPS), or UK money purchase RPS that contains any form of income guarantee (such as a guaranteed annuity rate), with a transfer value over £30,000.

 

 

For more details contact:

Sophie Heywood (Lenton)  
Corporate Communications Manager | Old Mutual Wealth

M: +44 (0)7834 499 558

T: +44 (0)23 8091 6770 | Ext: 21770

E: sophie.heywood@omwealth.com | W: www.oldmutualwealth.co.uk

Notes to editors:

Quilter is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

On a ‘go forward basis’, Quilter oversees £ 111.6 billion in customer investments (as at 31 March 2018).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset and single strategy investment solutions; and discretionary fund management.

The business is comprised of two segments: Wealth Platforms and Advice and Wealth Management.

Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

Advice and Wealth Management encompasses the financial planning network, Intrinsic; Old Mutual Wealth Private Client Advisers; discretionary fund management business, Quilter Cheviot; and Old Mutual Wealth’s multi-asset investment solutions business.

The Quilter businesses will be re-branded to Quilter over a period of approximately two years following separation from Old Mutual:

  • Intrinsic to Quilter Financial Planning
  • Private Client Advisers to Quilter Private Client Advisers
  • The Multi-Asset business to Quilter Investors
  • The UK Platform to Quilter Wealth Solutions
  • The International business to become Quilter International
  • The Heritage life assurance business to Quilter Life Assurance
  • Quilter Cheviot will retain its name.

On 19 December 2017, Old Mutual Wealth announced that it has agreed to sell its Single Strategy asset management business to the Single Strategy Management team and funds managed by TA Associates. The proposed transaction is subject to customary closing conditions, including regulatory approvals. 

Quilter is part of Old Mutual plc, a FTSE 100 group that provides investment, savings, insurance and banking. For the year ended 31 December 2017, Old Mutual reported an adjusted operating profit before tax of £2.0 billion. For further information on Old Mutual plc and the underlying businesses, please visit the corporate website at www.oldmutualplc.com.

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