The UK’s Brexit referendum on 23 June 2016 sealed the public’s decision to leave the European Union and the single market.
This has prompted many, especially pensioners, to decide where they would like to spend their retirement: at home or abroad?
A large number of people opted for door number two, following in the footsteps of the roughly 1.2 million Brits already living in Europe.
But what does this mean for financial advisers who are either in the UK or Europe and have clients on the continent?
To understand what is available to them, International Adviser caught up with Marta Gellova, chair of the European Financial Planning Association (Efpa) in the Czech Republic and member of the board of Efpa Europe.
Accreditation
Since 2017, Efpa has partnered with the UK’s Personal Finance Society (PFS), which means that British advisers’ qualifications are recognised across Europe.
This extends to Brits who holds either the PFS’ diploma in financial planning or advanced diploma in financial planning.
“What happens is all those with this level of qualification, they basically receive the European equivalent,” Gellova said.
They would be recognised as holding the European Financial Adviser (EFA) or European Financial Planner (EFP) qualifications, respectively.
This means that those professionals living and working in the EU should not worry about post-Brexit life as their qualifications are recognised; and for those looking to move, this should be one less obstacle to overcome.
Helping hand
Efpa has already been working with UK advisers in Europe to make sure they are on a smooth path when it comes to the UK’s exit.
Gellova said that the association’s Czech arm, which she chairs, supported the Aisa Group as they worked to achieve local accreditation.
The loss of passporting rights following Brexit is a real possibility, meaning financial advisers and planners may need to be regulated locally.
The EFA and EFP exams are, roughly, 80% standardised and 20% country-specific, Gellova explained.
So, when it came to Aisa Group sitting the local Czech exams, “we gave them a bridging module and bridging exam of the local legislation, everything that’s specific for our country”.
At the beginning of June 2020; Aisa Group chief executive James Pearcy-Caldwell, Aisa International director Clive Tutton and chartered financial planner Chris Lean took and passed the Czech National Bank’s capital markets exam, which is at the securities trader level.
Sharing experiences
While Efpa can help UK advisers in the EU, there is also reciprocity, where they can help local EU players as well.
Gellova said that advisers from Britain are used to being part of an association, so joining Efpa makes perfect sense.
Becoming a member also means “it’s going to be much better for their regulatory knowledge” of the EU country in which they operate.
But it’s not just about how UK advisers could benefit, there is also a great opportunity to share knowledge, experience and insights.
Some markets, like the Czech Republic and Italy, are at very early stages when it comes to making independent financial advice widely available.
But advisers could share best practice, especially considering that the financial advice and planning sector in Britain has been around for much longer than in other parts of Europe, and this could also create a greater sense of community.
Coming together
That is something that, according to Gellova, is already happening in the Czech Republic with the Aisa Group, as they set up a local “discussion club” on Friday nights to talk about the sector and best practice.
“In the Czech Republic, we do not have compulsory fee based advice. I mean within the Mifid regulation, yes, of course, but generally speaking, no.
“And our regulator doesn’t want to impose it by law. Some advisers who are certified want to offer fee-based services on their own. So they’re starting to do it in practice rather than waiting for the regulation to prescribe it, because they know it’s the best way for clients and their own practice.
“Together with our Aisa colleagues we can offer their experience on how to speak to the clients to ask for money and how the business operates if you offer fee-based advice,” she added.
