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Compliance tip: How to deal with clients who move abroad

We all have clients we have dealt with for many years; those who trust us and value the advice they receive. But what happens when these clients decide to move abroad and want you to continue advising them on their financial arrangements?

This is an area that is not straight forward. There are a number of issues you need to consider before you provide services to clients based overseas.

  • Passports: where clients are based in another EEA state, your firm may need to obtain an appropriate passport for the types of business involved: i.e. Mifid passport for investments, IMD passport for insurance or an MCD passport for mortgages. Note that obtaining a Mifid passport brings your firm fully into scope of Mifid requirements. If you are not already in scope, this impacts on various areas such as regulatory reporting, financial resources and the new telephone call recording requirements.
  • Authorisation in other EEA states: some business is not covered by the passports above; for example, pensions. If advising on such areas, it may be necessary to be authorised in the countries where clients are based.
  • PI insurance: does your PI policy cover you for services provided to overseas clients? PI insurers are particularly reluctant when it comes to the US, for example.
  • Local tax rules: do you have appropriate understanding of local tax rules?

If your clients move outside of the EEA, things can get more complex. Your starting point should usually be to confer with the local financial services regulator before you operate in their territory.

Russell Facer is managing director of Threesixty


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