The Federation of European Independent Financial Advisers (FEIFA) has unveiled a new membership category it says is aimed specifically at helping UK-based financial advisers to better assist those of their clients who live abroad.
FEIFA chief executive and co-founder Paul Stanfield said that the new membership category was an official acknowlegement of something that has long been true: which is that “a significant number of UK-based advisers” have clients who, for various reasons, are currently living outside of the UK, and/or have assets overseas.
“Advising these individuals has become increasingly complex for advisers in recent times, not least [because] knowledge of other tax systems, compliant products and national or even local anomalies can be difficult to obtain and challenging to remain current,” Stanfield, pictured, explained.
The new FEIFA “UK Membership” category is available to individual advisers who are UK-based and FCA-regulated, FEIFA said in a statement. The fee for a year’s membership under the new UK scheme has been set at £70 per adviser.
‘Third of advisers have expat clients’
FEIFA points to a survey carried out in 2014 by the UK’s Association of Professional Financial Advisers (APFA), which found that around a third of its membership has expat clients, and notes that more recent studies have found a similar proportion of advisers with clients living in mainland Europe in particular.
The organisation says it is “not surprised” by such research, pointing to other data which shows that more than 250,000 Britons have been moving overseas each year “on an intended long-term or permanent basis, for a long time”.
“Many of these [Britons] are doing so [moving overseas] due to career progression or for early retirement,” FEIFA says.
“They therefore tend to be high earners or HNWI, or both.
“In either case they are therefore likely to be the sort of individuals who have previously sought professional advice, not least from financial advisers.”
Regulatory issues
According to FEIFA, potential regulatory issues represent “a key area” for UK advisers with expatriate clients, which it notes it can help them to ensure that they are “informed and forewarned” about.
But too often, it says, UK advisers and their firms exhibit an unintentional ““knowledge deficit” when it comes to their grasp of the issues affecting their overseas clients.
“Even in Europe,” Stanfield noted, “where passporting facilities create a relatively comfortable environment in which to provide advice to clients in other European countries, the situation is rarely straightforward: does an adviser need to passport under the IMD or MiFID, or both? Under Freedom of Services or Establishment? And what will this allow him or her to actually advise on, and how?
“These are all highly important questions. Following the Brexit vote, advising clients in mainland Europe is unlikely to become easier in the relatively near future, and we will be there to assist our members through that as well.”
Knowledge Deficit
FEIFA insists that the UK advisory industry’s “knowledge deficit”, with respect to offshore issues, should not be underplayed.
“We often see advice given by UK advisers to expats that is simply not of a similar standard to the assistance that they provide to their home-based clients”, Stanfield added.
“This is usually very much unintentional, and generally occurs because of a lack of acquaintance with taxation implications, or [as a result of] the inadvertent use of products or services that are simply not compliant in the individual’s new country of residence.
“Often the adviser is actually unaware of these gaps in their knowledge.
“We have, however, seen an increase in realisation of these gaps, within the UK adviser sector. This has also been a driver towards [our] creating this new membership category, and looking to assist wherever we can.”
FEIFA is a non-profit trade association for English-speaking advisers, originally founded to represent those who were either based in or operating on the European mainland, or with clients living there. Today it says its member advisers are active in more than 30 countries across the continent and, in some cases, further afield as well.
Stanfield, who is now based in the UK, co-founded FEIFA in 2009 with five other individuals. He has worked in financial services for some 25 years and was managing director of an IFA operation in mainland Europe for more than a decade. Since April 2014, in addition to heading up FEIFA, he has also been secretary general of the Fédération Européenne des Conseils et Intermédiaires Financiers (FECIF), a pan-European trade body representing almost 250,000 advisers and intermediaries.
