IFAs told not to rule out moving to an EU member state and passporting their business back
The Association of Independent Financial Advisers has told IFAs not to rule out moving to an EU member state and passporting their business back into the UK as the retail distribution review (RDR) approaches. It has highlighted the risks involved in its report, Advice Horizons, which aims to help firms make strategic decisions about their businesses, but said that it was still a route worth considering.
‘The costs of setting up in a different country, managing the “domestic” legislative and regulatory demands, and also of supervising staff based in the UK can be demanding,’ the report reads.
‘It is not the easy option it may be portrayed as but, as firms out-source many of their activities, it is a matter that should not be ignored – especially given the tax plans of the UK Government.’
Passporting allows firms to fall outside the Financial Ombudsman Service (FOS), Financial Services Compensation Scheme (FSCS) and the RDR.
The report highlighted the complexities involved in such a move, including the need for authorisation from a firm’s new home state, dealing with an inexperienced regulator, and the potential competitive disadvantage of clients falling outside FOS and the FSCS protection.
Aifa director Robert Sinclair (pictured) said that it had produced the report with Legal & General to help advisers deal with regulatory and economic change.
‘Given the challenges faced by the profession, waiting to see what happens is not an option for firms wishing to thrive post 2012,’ he said.
