Financial advisers on QROPS in the Netherlands, France, and Spain may soon be invited to subscribe to a ‘code of conduct’ by fellow industry professionals. There has been a buzz among advisors on the ‘net’ about the quality of advice offered to people that seek to move their UK pensions overseas into qualifying recognised overseas pension schemes (QROPS). An international QROPS code of conduct is being proposed to protect individuals from providers or advisers that do not have their interests at heart.
Any new QROPS code of conduct would be designed in consultation with advisers, who in turn would be expected to abide by it. Unfortunately, codes of conduct often seem to spring up where there is an absence or demand for legislation. However, if such a code is voluntary, it is nigh on impossible to enforce it.
From the provider’s side of the equation, Malta has led the way through the imposition of legislation governing the way QROPS are to be handled by the growing number of scheme providers established since 2009 within its jurisdiction.
The Maltese regulatory authority require the administrator/trustee of each scheme to submit an independent audit each year, which covers the scheme’s finances and includes a statement that addresses the scheme’s compliance. In essence, HMRC could follow the lead of Malta and introduce such independent auditing to vet the processes of scheme providers. The administration of such a system could be paid for by the providers themselves as part of their annual application to be on the QROPS’ providers list. It is still ‘early days’ in the evolution of QROPS legislation. In the interim, however, the proposed code of conduct may provide advisers with a framework for how UK pension transfers should be handled professionally.