In an email seen by International Adviser, Thames River International director Nigel Ball has written to the leaders of IFA firms to warn them that the Code “may jeopardise the ongoing and future success” of their businesses.
It is not clear from the email what Thames River International’s business offering is, however Ball offers to “introduce” IFA firms to alternative, non-Isle of Man-based, offshore providers.
The firm is based in Hong Kong and the Philippines.
The industry source told IA that this type of business promotion goes on “all the time” and needs “to be exposed”.
“I think it’s up to Isle of Man companies and others to say to the advisers you should be proud to put your business in a jurisdiction with good regulation. And it’s my job, among others, to convince advisers that’s what they should do rather than cutting and running to a dodgy jurisdiction.”
Life company support
The email is a marked departure from the messages coming from the life industry and IFAs over the past year, which have been supportive of the greater transparency initiatives announced by the IoM Financial Services Authority.
When worldwide commission and fee disclosure was first tabled in 2016 for Isle of Man-headquartered life companies only, it created quite a stir – specifically around competition issues with life companies not based on the island.
Consultations between the regulator and industry saw plans for generic disclosure scrapped and other changes implemented to avoid duplication or conflict with other jurisdictions.
Senior representatives of Old Mutual International, RL360°, Canada Life and Zurich recently spoke to IA about their preparations for the Code’s deadline.
Cut and run to dodgy jurisdictions
At IA’s Fund Links Forum in September 2017, RL360° chief executive David Kneeshaw spoke about the concern that “some advisers will go to dodgy jurisdictions for their business rather than the Isle of Man”.
“I think it’s up to Isle of Man companies and others to say to the advisers you should be proud to put your business in a jurisdiction with good regulation. And it’s my job, among others, to convince advisers that’s what they should do rather than cutting and running to a dodgy jurisdiction,” he said.
Not required in Malaysia
In his email, Ball specifically mentions “Ailo member companies, including but not limited to RL360°, Friend Provident, Investors Trust Assurance, Old Mutual International and Hansard”, as companies that have “made a decision to impose upon [IFAs] potentially penal rules, conditions and disclosures that may jeopardise the ongoing and future success of your business”.
“Rules that are not called for under the rules governing business written by Malaysia-based brokers,” he said.
From 1 January 2019, life companies headquartered in the Isle of Man will have to provide bespoke key information documents for clients that outline all of the fees and commissions paid to advisers.
“There are professional, high quality and fully regulated offshore insurance and investment product providers, in other (non-Isle of Man) jurisdictions which will not force you into such commission and fee disclosures,” Ball wrote.
“Using such an offshore provider will allow you to continue to run your business in line with your current rules and practices and without having to disclose your fees and commissions.”
