Nigel Green, the chief executive and founder of global IFA group deVere, has bought a 24% stake in STM Group, the London-listed cross-border provider of QROPS and other financial products.
The stake was acquired as part of a £1.59m purchase of new shares in the company, and is subject to regulatory approval, according to the London Stock Exchange’s Regulatory News Service.
The proceeds of the issue will be used “to advance the company's current work programme and free-up regulatory capital for business purposes”, the RNS statement said.
In a statement today, Green said: “I believe the new pensions guidelines [from HM Revenue & Customs, expected this week] will lead more clients to move their pensions to Malta, which is part of the European Union, and has 59 double taxation treaties. STM is extremely well placed to look after these clients and provide them with the best possible benefits.
"It is essential to give deVere clients, and consultants, the best chance to take advantage of this. We had therefore already formed a good relationship with STM some months ago, and this relationship will not only help us provide the best pension products, but also help us and STM develop new wealth management solutions for our clients.”
STM Group is based in Gibraltar and incorporated in the Isle of Man. Earlier this month, it reported pre-tax earnings in the year to the end of December fell by more than half to £700,000 from £1.7m in 2010, on revenue that also fell, by 6.7%, to £9.8m.
The shares closed at 19.5p last night in London, unchanged from Friday but above their all-time low, touched back in September, of 13p. They have been as high as 73.5p, in mid-November 2007.
Active in QROPS development
STM Fidecs is perhaps best known to financial advisers with expatriate clients for its active role in the development and provision of qualifying recognised overseas pension schemes (QROPS). It was among the first companies and remains one of the leaders in the development of such schemes in Malta, which was first recognised by HM Revenue & Customs as a jurisdiction to which UK pensions could be transferred at the end of 2009.
It has also developed schemes that accommodate the transfers of UK pensions of individuals retiring to or returning to the US, and last year, introduced a “multi-jurisdictional” scheme to enable expatriate UK pensioners to move their pensions between countries as needed, without incurring additional fees.
However, the STM pension division contributed only £600,000 of revenue to the STM Group in 2011 from its Malta and Gibraltar pensions businesses, according to the company's most recent full-year results statement.
Still, it noted, “given the scalability of the traditional [QROPS] product, and the recent launch of some new pensions products in Malta and Gibraltar, it is anticipated that 2012 will be the year that STM’s pension division changes the mix of the STM Group.”
If this is what Green is betting on, he is also taking a chance that HM Revenue & Customs will not significantly hobble the QROPS industry with new regulations, such as those outlined last December in an unexpected package of proposed changes to the legislation which governs how UK pensions may be transferred out of the country.
AS reported, the final version of these regulations has yet to be published, although International Adviser managed to obtain a copy of guidance that was accidentally posted on the HMRC website last week.
The fact that STM offers QROPS that may be used by those retiring to or returning to the US could be relevant to Green, since deVere, of which he is a majority owner, is currently expanding into the US market.
Last month, deVere issued a press release stating that it had transferred "almost half" the £1.3bn worth of pensions moved offshore via QROPS.