Becoming the latest IFA firm to potentially move away from overseas pension transfers, Paul Davies, co-founder of the firm, which has offices in the UK and Australia, told International Adviser that the rebrand was a merger between the UK-based Global Qrops and its Australian sister brand, bdhSterling.
“Due to the success of the bdhSterling brand in Australia, the brand has now been harmonised with the UK company,” he said.
Davies admitted that the appetite for Rops has dropped off in recent years following UK’s pension freedoms introduced in April last year, but still insisted that they are the right product for many British expats moving to Australia.
“Although the gap has closed between the appeal of retaining a UK pension compared to transferring to a Rops, there are still certain circumstances where transferring to a Rops presents greater benefits and opportunities, for a pension member,” he explained.
“Australia is a perfect example where transferring benefits, to an Australian Rops, can provide the member not only with more tax efficient benefits for an Australian resident (compared to being paid from a UK scheme) but also funds can be invested and paid in the currency of the member’s lifestyle.”
Sipps M&A
It follows hot on the heels of similar rebrands and a flurry of M&A activity among international Rops specialists.
The likes of STM, Sovereign, Momentum and IVCM have in recent years moved away from solely focusing on Rops, with many entering the UK with acquisitions in the self-invested personal pensions (Sipps) industry.
Malta-based Momentum Pensions purchased a 50% stake in UK-based Sipps provider Calderwood Pensions back in October 2014 in a bid to extend its product range and exclusively offered Rops which it did until earlier this year.
In October last year, Brooklands Pensions changed its name to IVCM, although it has recently is reopened its New Zealand Rops.
In April, the Sovereign Group bought UK-based MW Pensions, a specialist in Sipps schemes, for an undisclosed amount.
Last month, STM, which has operations in Malta and Gibraltar, Spain, and Jersey, also entered the UK market with the buyout of Sipp provider London & Colonial and its subsidiaries for nearly £5.4m ($7.2m, €6.4m).
Australia-headquartered platform technology firm Praemium has also recently announced plans to buy UK Sipp provider Wensley Mackay.
Falling Rops sales
The Rops industry has seen a decline in sales in recent years, with some providers suggesting that the products have become more difficult to sell since the introduction of the pension freedoms.
Insurance giant Old Mutual International (OMI) saw a sharp drop in sales of Rops, which along with challenging economic conditions saw the insurance giant’s net client cash flows plummet by 33% in the first-half of 2016.
A UK tax authority’s crackdown on overseas schemes, particularly from Australia, has also dampened demand.
Rops crackdown
In July last year, HM Revenue & Customs dropped thousands of Rops from its recognised overseas pension schemes (Rops) list, after they failed to meet the conditions of the ‘pensions age test’, which states that benefits can only be paid out of a scheme before age 55 in cases of “serious ill health”.
