Retail supers
In August, international pension provider IVCM announced that an Australian superannuation plan it runs in conjunction with Tidswell Financial Services became the first retail super scheme to get back on the HMRC list – a trend Davies expects will continue.
Earlier this month, STM, which has operations in Malta and Gibraltar, Spain, and Jersey, also launched a Gibraltar-based Australian superannuation scheme, revealing there is market there for solutions aimed at British expats.
Davies predicted the that number of retail super funds making it back on to the HMRC list is expected to continue, as is demand for the products driven by the increasing numbers of UK citizens moving to Australia – which he puts at 30,000 a year.
FCA’s ‘advice safeguard’
In early October, the UK’s Department for Work and Pensions (DWP) announced it was considering whether to scrap the ‘advice safeguard’ for expats, which requires individuals to consult an FCA-regulated adviser before they can transfer their defined benefit (DB) pension savings into an overseas pension scheme.
Under the requirement, individuals, including those living outside the UK, must take financial advice from a UK-based Financial Conduct Authority (FCA)-regulated adviser for all transfers out of final salary or guaranteed annuity rate (GARS) pension schemes for pots over £30,000 ($39,631, €35,126).
Davies, whose firm has both FCA and Australian-regulated advisers, said removing the advice safeguard would be a “step backwards for the consumer”.
“It’s a dangerous move for the consumer because they won’t have the protection of regulated advice. Should the advice be erroneous or for any reason they need to make a complaint then they would have no one accountable for it,” he pointed out.
M&A activity
Commenting on the proliferating trend towards M&A activity among international pension providers in recent years, Davies said he doesn’t believe it signals a move away from selling Rops, arguing it’s likely the firms are just extending their product range.
STM, Sovereign and Momentum have all entered the UK market since 2014 with acquisitions in the self-invested personal pensions (Sipps) industry.
“It makes perfect sense for an international pension company that they have a UK option too.
“I don’t think it’s a move away from Rops. I think it’s a sensible move for a lot of those companies to offer a full range of options.
“Even before the pension freedoms, if someone was moving overseas than Sipp could be a viable option still. Just because someone’s overseas doesn’t mean they need a Rops,” he concluded.
