Brexit red-tape and complications have forced financial advisory businesses to “abandon” UK expats living across Europe, global advisory firm DeVere Group has revealed.
Many UK banks and advice companies are now unable or unwilling to work with British nationals who live in the EU, as industry rules have changed following the UK’s exit from the bloc.
James Green, regional manager of DeVere Europe, said: “Most British expats in Europe maintain strong financial links with the UK, but in the wake of the implementation of new Brexit rules and regulations, tens of thousands have been routinely abandoned by their financial services providers, such as advisers and banks.
“Pre-Brexit, UK-based financial advisers were legally allowed to advise expat clients in Europe through a system known as ‘passporting.’ But since the UK’s exit, those legal rights for UK-based companies have been revoked.
“Following a transition period, since 1 July 2021, only those advisory firms that comply with local laws and regulations in each EU nation in which they operate are able to give financial advice to people resident in those countries.
“This has meant that many UK-based advisory firms have been forced to ditch their expat clients as they are not now legally compliant to give advice in European Economic Area countries.”
There are more than 1.3 million British expats in Europe, according to official estimates.
Where does this leave clients?
Green added: “Clients typically build-up a long-term relationship based on trust and rapport with their financial advisers. They work closely so the client can reach their long-term financial goals for themselves and their loved ones.
“The cutting of these ties has caused many to experience, distress, anguish and potential financial loss as their financial strategies might change too.”
The issue also extends to UK banks too. In October 2020, International Adviser reported that UK-based private bank Coutts wrote to its customers based in the EU as it was no longer able to operate in the region.
Advisory firm Blevins Franks also previously talked about how several British expats living in the EU started receiving similar letters from other UK-based institutions about closing down their accounts.
They are able to continue to be clients if they have a UK address, DeVere Europe said.
Green added: “To operate without passporting becomes hugely complicated, incredibly time-consuming and very costly for banks. This is why they are unwilling to work with customers across Europe – even if they have been with them for decades and regardless of the size of their bank accounts.
“This has caused considerable disruption for many individuals, families, businesses and other organisations, especially where there are larger deposits, standing orders, regular payments and credit facilities to another bank.
“New Brexit-triggered rules for UK banks and financial advisory firms have left many British expats across Europe feeling worried.”