"It is highly likely that many advisory companies will be unable to meet some or all of the stringent new regulations"
Advisers must ensure they can still fully service new or existing clients who have transferred their UK pension into an overseas pension scheme following new rule changes, deVere Group has warned.
This summer, the Malta Financial Services Authority (MFSA) is implementing new rules which will impact the way in which Pension Trustees administer both new scheme applications and existing members on a number of levels.
There are estimated to be about 30,000 UK pensions already transferred into Malta-based Qualifying Recognised Overseas Pension Schemes (QROPS).
Under the tougher new regulations, which enhance client protections, it is no longer enough for the financial adviser to only be licensed - the license must also allow the adviser to provide investment advice to the member.
In addition, the adviser must be regulated in the jurisdiction where the client is based.
deVere believes that "many advisory companies will be unable to meet some or all of the stringent new regulations and, therefore, will not be able to service new or existing clients in this area".
deVere says it has worked with each of the Malta Trustees to ensure that it continues to comply with the regulatory changes.
James Green, deVere’s divisional manager of Western Europe, commented: “Malta is a preferred jurisdiction for those wanting to take advantage of the considerable financial benefits of transferring their UK pensions outside of the UK.
“In a move welcomed by deVere, the Malta Financial Services Authority has made significant changes to the Maltese pension regulations. Coming into effect on 1 July 2019, these changes will have a major impact on how advice and service is given to those with Malta-based QROPS.
“It is highly likely that many advisory companies will be unable to meet some or all of the stringent new regulations and, therefore, will not be able to service new or existing clients in this area.
“As such, I urge all retirees to check as a matter of urgency that their financial adviser is able to fulfil their obligations in accordance with the sweeping rule changes.
“For expats or for those who are planning to retire abroad, QROPS – with all their significant associated benefits such as a choice of currency, succession planning advantages, greater investment flexibility and pension consolidation – remain an important solution to help them reach their long term financial goals.
“The Malta regulator’s forward-thinking approach serves to further strengthen their appeal even more.”