The Federation of European Independent Financial Advisers says many advisers considering passporting into the UK to avoid RDR regulations may find the process too costly or intensive to be worthwhile.
Feifa chief executive officer Paul Stanfield says regulatory and legislative concerns need to be assessed, such as the possible need for an office on the Continent or increased knowledge of labour laws and tax systems.
He says: “It is true that an IFA passporting into the UK would not need to pay any FSCS levy but if an office is required in another EU state, then this will obviously entail potential increases in variable and fixed costs and possibly greater liabilities in areas such as staff benefits and entitlements.”
Stanfield says that passporting into the UK can be viable if it is seen as part of a long-term and sustainable business model but he adds: “Passporting into the UK is not an easy option and needs very careful and significant evaluation before being pursued.”
Informed Choice managing director Martin Bamford says: “Passporting is a pretty desperate move to avoid regulation designed to improve service.”