Montfort International founder on cross-border planning and banning one-man bands from DB transfer advice
Few advisers would lay claim to being a pub finder for a Hollywood legend. But in Montfort International founder Geraint Davies’ case, the truth is stranger than fiction.
Davies’ family were in the hotel business and, as a youngster, he was encouraged to follow in their footsteps – which was how 1960s “rat pack” star Sammy Davis Jr. ended up taking him under his wing during a stay in Worcester while filming nearby.
Davies rubbed shoulders with famous names such as Jerry Lewis through Davis Jr. and was introduced to a film editor. However, any thoughts of a career in the movies were curtailed as Davies’ father insisted he did his A-levels. These were duly followed up with a business degree.
Davies went on to launch Montfort International in 1995 to focus on cross-border financial planning, which is not surprising given his personal experience.
Having married an Australian, he emigrated and started his financial services career in 1982 in the Western Australian city of Perth, advising British migrants.
“Most of my clients in Australia were migrants and had no idea of what they had left behind. They thought everything was the same in different countries and it was worrying the advisers they saw before they left often sold them inappropriate products.
“Many do not understand that other countries have got different rules,” he says.
Davies’ interest in cross-border advice continued when he moved back to the UK in 1992 and he has spent many years immersing himself in the pension system.
He worked closely with HM Revenue & Customs prior to launching an Australian pension transfer solution in 1995 and has played a key role in the development of qualifying recognised overseas pensions schemes.
However, it is due diligence around defined benefit pension transfers that currently occupy his thoughts, with the Port Talbot steelworkers’ pension crisis
bringing home to him that things need to change.
“We haven’t got tough enough on it and there are grave concerns when people offload DB transfer advice to another adviser,” says Davies.
He believes contingent charging for DB transfers should be banned to avoid conflicts of interest where biased recommendations are motivated by guaranteed revenue for advisory firms.
Davies would prefer fees for work in this area to be capped, say at around £500, and suggests they could be paid for by the pension scheme under a debit-style arrangement. The advice fee would be reclaimed by the pension scheme from any lump sum taken by the client at retirement.
Davies also thinks one-man band advice firms should be banned from DB transfer business, as decisions should be reviewed by three pairs of eyes to avoid mistakes. This is a strategy Montfort uses for all its financial planning decisions.
“It may be more expensive but it can give clients great reassurance. It’s too easy for just one person to sign the report off virtually straight away, even if they don’t have much experience.
“I would also make sure firms had someone registered with the FCA checking the advice. We live in the real world, not a perfect world. That’s why we talk about three pairs of eyes.”
As an international adviser, Davies describes Montfort as an interpreter of different financial products in different countries.
However, this is not without its challenges, given the complexity of personal circumstances and tax implications across the world.
“We have one client who was a pilot and had a property in Germany. He was a South African citizen who claimed he lived in France and was resident there for tax purposes, even though he hadn’t been for six years.
“He lived on a boat in the Channel Islands, flew a plane to two different locations in Canada and had a girlfriend in both those places. He also had a UK pension fund. So, we had to work out where he was a tax resident.”
Where do you start? You need facts, knowledge and experience, says Davies.
“It’s about knowing how to dissect a situation. We unravel it by looking at the timeline and how long the person had been in a particular country. You’ve got to call upon your peers and know which questions to ask, otherwise ridiculous fees are charged. You speak to your tax mate, give them the situation and see what they think.”
When needed, Montfort’s advisers go to various experts, such as visa and tax specialists around the world. It is also called upon by firms that recognise they need help advising clients who have moved or are moving abroad or foreign nationals in the UK.
That said, Davies is concerned some firms are still guessing or ignoring the more specialist needs of such clients, or that they simply “don’t know what they don’t know”.
“We had a client who was emigrating to Australia with his wife. But his wife didn’t have a visa, which you need to go.
“There was also a stepson planning on going. What was he doing? He had just left school and was lounging around at home. We said he wouldn’t get a visa either.
“Their previous adviser just had not realised what was needed. We ended up getting the son back into education, against his will, so he could get a visa and go to Australia with his family.”
With the Brexit negotiations still trundling on, what suggestions does Davies have for advisers dealing with clients who may be affected by the changes?
“My advice is to keep abreast of the changes and review things regularly – but you can’t work on predictions, only on what is definitely going to happen,” he says.
“It’s like when you’re at school and you’re taught to cross the road. There’s a lot of traffic out there, so you have to look both ways and cross carefully.”
What’s the best bit of advice you’ve received in your career?
I’d started work in a hotel when the manager said: “I see a degree certificate here” and crumpled up a piece of paper before adding: “This is your first day of the real world.”
What keeps you awake at night?
Thinking of new ideas and dealing with different people in different situations.
What has had the most significant impact on advice in the last year?
The penny is dropping with the FCA with regards to what’s going on with scams run by overseas advisers.
If I was put in charge of the FCA for a day, I would…
Run through a video that shows good advice and bad advice. I’d also want them to see the real world, not a perfect world.
Any advice for new advisers?
If your clients can’t afford it, show them how they can. Never make anything up and listen to the stories of old advisers.
1995-present Managing director, Montfort International
1992-1995 Financial consultant in the UK
1985-1992 Financial adviser, MLC (previously Capita), Australia
1982-1985 Financial adviser, City Mutual, Australia