This week I have discovered soup, flasks, and to-do lists. I’ll qualify that – I have always been a sandwich man for lunch but am now entirely won over by the high net energy gains offered by soup on account of a fantastic ‘digestion effort-to-nutrients’ ratio. The digestive process consists of first creating a 100 ̊soup in the Stomach (remember that body temperature is 98.6 ̊).The more a food is like 100 ̊ soup, the easier it is for the body to digest plus the water content of the vegetables in soup allows for efficient exchange of nutrients into body cells. I won’t bore you with the other two revelations but needless to say every day’s a school day.
No matter where we are in life, or how experienced, there’s always new stuff to learn. Some of it benefits us, some of it won’t and the trick is to filter out the latter and invest more into what’s left.
Our latest adviser research into offshore investing for UK investors highlights some clear education gaps, particularly around QROPS and QNUPS which, this year, advisers expect to comprise only 2.3 per cent of all offshore solutions used (the lions share being offshore bonds).
The overhaul of the QROPS legislation last year substantially changed the landscape of the industry.
Since ‘Q Day’ last year we’ve seen prices rise, operational efficiency and servicing standards fall, significantly less product and increased complexity as the remaining jurisdictions try to fill the gap left by Guernsey’s exit. That leaves a lot of uncertainty and has contributed to a tendency for advisers to err or the side of caution and avoid that which they are not 100 per cent clear on.
But the answer to uncertainty is not avoidance and Independent advisers may be sitting on a mis-selling time bomb by not advising on qualifying recognised overseas pension schemes, as the regulator confirmed that IFAs must consider any such products that fall under the definition of retail investment products.
Since some QROPS may fall under the RDR definition of retail investment products it rather makes it a no-brainer.
Advisers’ lack of understanding (and use) of QROPS is a massive issue. Advice requires knowledge not only of the financial planning issues but tax consequences of the UK and the country of residence, visa implications and social security issues. Not advising on something you don’t fully understand is commendable… unless it happens to be the most appropriate solution, in which case it’s negligence.
Phil Wickenden is managing director of So Here’s The Plan firstname.lastname@example.org