QROPS, Qualifying Recognised Overseas Pensions Schemes, has received some mixed press over the past couple of years. Some of the more negative press has been as a result of aggressive and inappropriate sales of the schemes to unwitting members of the public, some of whom now face the very real risk of penalties from HM Revenue & Customs.
It is perhaps not surprising therefore, that the International Adviser poll found that 57% of advisers fear it could become a mis-selling scandal.
There have been other warning signs from the adviser community. At the end of last year the UK’s largest IFA network, Sesame, told its 3,000 advisers they were not to advise on QROPS due to “the complications and significant pitfalls associated with them”.
In order to avoid QROPS becoming a mis-selling scandal, providers perhaps have a duty to ensure that advisers are educated about the products and are aware of the many facets which constitute sound QROPS advice. This includes considering the jurisdiction of a QROPS, its tax implications and other benefits which may be lost or gained through using a QROPS.
Rob Shipman, managing director of Sovereign Trust CI, said: “In our view QROPS are not going to become a mis-selling scandal. Trustees that provide QROPS services in Guernsey, for example, are very well regulated and have put in place a code of conduct.
“The legislation regarding QROPS is also very stable. However, we are aware that advisers need more technical support in this very complex area to ensure that clients are fully aware of the implications a transfer to QROPS may have. It is for this reason that we have launched, in conjunction with PenTech, our completely free independent on-line technical support tool for advisers.”
Whether or not QROPS does become a mis-selling scandal only time will tell, but providers may do well to ensure that the advisers they use have as much help and guidance in this complex area as possible.
