As reported last month, Skandia International, one of only two companies offering offshore bond products in Belgium, decided to temporarily suspend business after the local authorities decided to implement elements of the review of the Markets in Financial Instruments Directive (MiFID II) early.
It is not just advisers in Belgium however, which face a limited choice.
In recent years, Friends Provident International and Hansard have decided to withdraw their products from the region, citing the slower pace of growth and increased legislative requirements.
Chief executive of the Federation of European Independent Financial Advisers, Paul Stanfield, now also secretary general of FECIF, an organisation which, under the leadership of former chairman Vincent Derudder, has long campaigned for a less burdensome legislative environment, said there is no doubt the number of products available has “diminished”.
“Regulation is clearly very important, but if a restricted product range becomes the unintended consequence, then it’s clearly not so good for the client,” said Stanfield.
“One has to ask whether national regulators are making it hard for international companies to come. If this is the case then is it against the ethos of the European Union’s free market?”
One solution is the burgeoning international platform market, but this is not clear-cut, according to Forth Capital’s Tom Tracy, who said in some cases a platform may not be a suitable option for a client.
“Platforms are more transparent and cheaper, but in Europe they don’t quite work yet as they need to be multi-currency, multi-transactional and flexible for the client,” he said.
The challenges faced by the international platform market are acknowledged by Michael Fordham, chief executive of Platform One, who pointed out that, in order to meet the needs of such a broad market a high degree of flexibility must be built into the platform.
Some examples of these requirements include offering products to suit the tax needs of different jurisdictions, allowing for different levels of adviser authorisation as well as the usual currency and fund options.
Stanfield does offer some hope for advisers in Europe though, suggesting that, rather than opting to take the more profitable route of targeting the Middle or Far East, some platform providers are looking at options in Europe.
