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Specialist fraud unit set up to monitor Qrops abuse

The Government has set up a specialist fraud unit to monitor Qrops due to concerns about fraudulent activity and irresponsible transfers.

An internal ABI pensions note, seen by Money Marketing, reveals that HMRC has established a dedicated team to monitor the activities of Qrops amid concerns over “general abuse” of schemes acting outside the legislation.

The specialist Qrops unit is a sub-division of the Anti-Fraud Unit. An HMRC spokesman says the unit, contained within its pension scheme services department, works closely with officials at the Pensions Regulator and the FSA.

Worldwide Financial Planning IFA Nick McBreen says: “I am not at all surprised HMRC is looking very closely to make sure schemes are used appropriately. I think it is inevitable that the Government will eventually tighten the rules around Qrops.”

Montfort International managing director Geraint Davies says: “A lot of people offering Qrops are bending the rules. There are some innocent advisers in the UK working with Qrops providers in other countries who are not aware what they are up to.”

In April 2008, HMRC deregistered all Singapore-based Qrops, leaving members vulnerable to a 55 per cent unauthorised payment charge on their transferred pot.

Last September, HMRC revoked the status of Hong Kong-based Beazley Consulting Pension Scheme as it failed to meet its criteria for Qrops status.

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. David Trenner - Intelligent Pensions 24th February 2011 at 1:55 pm

    Tom

    You have made a common mistake when you say “HMRC deregistered all Singapore-based Qrops”.

    QROPS are not approved, not regulated and not registered. They are just recognised: which is why they have been so open to abuse.

    David

  2. About time somthig is being done.

    If HMRC made it compulsory that advisers need to be CII G60 qualified. The cowboys would be a thing of the past.

    http://www.pension-transfers-qrops.com/

  3. Definitely, it cannot be right when you have ‘advisers’ in places like Asia doing QROPS with client pension funds running into the £100,000’s and they have never sat FPC or equivalent exams let alone G60.
    The trust companies should also play their part and screen these salesmen rather than just chase the $$$s that they bring into them.

  4. Tony Chamberlain 8th March 2011 at 11:46 pm

    All very good points above. However, let’s get some clarity here.

    There is a lot of scaremongering, generally, on this topic and from some people who I believe have ulterior motives for generating it. The schemes that have been ‘de-recognised’ if you like relied upon the suitably loose legislation within their jurisdiction to push the parameters of what was in the spirit of the QROPS rules – and failed; whether intentionally or not they, have been adjudged to have manipulated and broken the rules. The schemes in question both sold their own products and therefore this has led to calls for research into mis-selling.

    Mis-selling, in UK terms, is the advising, recommending on and selling of a financial product that is totally unsuitable for the client. Even in the UK, HMRC has no control over mis-selling as it is the domain of the Financial Services Authority which is responsible for regulating advisers and therefore advice. The FSA, in turn, has no control over the selling and advice processes of other countries, which has to be left to the regulators in those jurisdictions themselves. Many countries have little or no legislation or regulation for financial advisers.

    So those of you out there who keep throwing the muck, please get a grasp of the situation before you do so. Indeed, there are QROPS that may have been set up specifically to take blatant advantage of and abuse the rules, but there are also genuine, bona fide pension and superannuation schemes (that are now QROPS) which were already registered in their countries of jurisdiction before QROPS came along. I agree that many of the products sold are done so by ‘salesman’ and not advisers, but it needs to be understood that QROPS after all, are not UK products so UK selling and advice standards do not apply – although I would prefer if they did.

    I was an IFA in the UK (check on the FSA register) and operate a genuine QROPS brokerage with an international tax specialist who has worked for HMRC, EY and PWC all over the world. The absolute nonsense we read and hear about QROPS and in particular the attacks on New Zealand QROPS, confirms to us that even the most, so called ‘informed’ or professional advisers, do not have enough knowledge of the market nor of the differences in legislation and regulatory requirements of the various jurisdictions to make judgement. So far as the wrong or poor ‘advice’ being given is concerned, it seems to me that it is not the client’s who are complaining, but the competitors who cannot compete or do not understand – sour grapes is an acquired taste!

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