At launch, investors in the Gibraltar based QROPS will have the choice of two platforms, one onshore and one offshore, although L&C said it is currently in discussions with more platform providers, both onshore and offshore.
As previously reported, L&C has been considering the launch of its QROPS for some time.
Adam Wrench, product development manager at L&C, explained that traditionally, clients using a Qualifying Recognised Overseas Pension Scheme would have the underlying assets put into an offshore bond – ostensibly for the tax benefits.
However, Wrench said by using an underlying offshore bond, the client is then exposed to two layers of charging – once for the top wrap, the QROPS, then again on the offshore bond. By using a platform, Wrench said, these costs can be significantly reduced while still providing the client with exactly the same tax advantages through the QROPS.
“Using a platform is, as far as we see it, the most efficient way of investing a client’s assets within a QROPS,” said Wrench.
“Many clients will have become used to a certain level of service, not to mention accessibility to funds, while in the UK and may even have a strong affiliation to one platform. We aim to help them continue this and hopefully, by offering the onshore option too, drive competition in the offshore market both for QROPS and platforms.”
The reasons for using either an onshore or offshore vehicle will vary depending on the client’s circumstance and for advisers who understand these complexities, said Wrench, can be an opportunity for advisers to add real value for their clients.
The launch of the QROPS is planned for April at which time, L&C said it will reveal the two platform providers it will initially be making available.
