In our view, a client who is seeking advice on QROPS will benefit from engaging a fee-based, independent adviser who will undertake the following:
- Assess the suitability of QROPS to each client on a case-by-case basis and in a number of cases, best advice will be to leave the pension fund in the UK.
- Identify which QROPS jurisdiction is most suitable to the client’s circumstances. For example, should they utilise a scheme operated in the EU rather than a Channel Islands based scheme?
- Identify which QROPS provider to recommend. The adviser should demonstrate what due diligence has been undertaken on the provider. For instance, if the provider is privately-owned, who are the shareholders and what is the track record in pension administration?
- Confirm all advice in writing in a ‘QROPS Suitability Report’ which will also confirm the set up and ongoing fees to be incurred. The fees charged should be 100% transparent and the cost of advice should be unbundled and distinct from the QROPS plan charges.
The pension advice process referred to above is standard practice among most UK-based advisers, and would serve to protect the interests of internationally mobile clients and help put a stop to clients taking up unsuitable schemes.
