Could an October Surprise Shift the Deadlocked Trump-Harris Race?

[churchill]

It looks as if the UK Government is looking closely at these schemes .

http://www.telegraph.co.uk/money/main.jhtm...mpensions02.xml

[GuestHouse]

Before we start cursing the UK Government.....

While HMRC refuses to disclose why individual funds have been dropped, the decision has surprised the pension industry. Many believe that persistent rumours of mis-selling in the Far East could be the cause.

Fund providers and UK independent financial advisers say investors are being targeted with "pensionbusting" promises, allowing them to take their funds partly or wholly in cash well ahead of retirement.

"With little or no regulation of advisers in many worldwide locations, they are clearly open to abuse, first from the product providers and second from the product distributors," says Sam Instone, an adviser with London-based AES International.

Rest of the article can be found here at the Telegraph: Source: http://www.telegraph.co.uk/finance/persona...k-pensions.html

Now what was I saying about the Offshore Financial Advisors and Used Car Salesmen?!

Edited April 17, 2009 by sbk

[Misty]

Before we start cursing the UK Government.....

While HMRC refuses to disclose why individual funds have been dropped, the decision has surprised the pension industry. Many believe that persistent rumours of mis-selling in the Far East could be the cause.

Fund providers and UK independent financial advisers say investors are being targeted with "pensionbusting" promises, allowing them to take their funds partly or wholly in cash well ahead of retirement.

"With little or no regulation of advisers in many worldwide locations, they are clearly open to abuse, first from the product providers and second from the product distributors," says Sam Instone, an adviser with London-based AES International.

.

Now what was I saying about the Offshore Financial Advisors and Used Car Salesmen?!

Have to agree with you regarding the Offshore Financial Product Salesmen. But the Product Providers (usually insurance companies) are just as guilty--of allowing their products to be sold by unregulated, unqualified, inexperienced, uninformed, and sometimes downright dishonest individuals.

The regulators in places like the Isle of Man are perhaps the most guilty. They require so little of the product providers in terms of who sells the products, and especially by way of product transparency. Try working out the fee structure of some of these things based on the "Terms and Conditions" that is provided. Once you do, you'll find the layered fee structures are amazingly high (and complex in structure), yet the amounts aren't spelled out clearly in any of the literature (and the salemen aren't required to clarify either). It's not the FSA's problem--the regulator in the Isle of Man (or other offshore location) is a separate entity.

I wonder why this sort of business is still going on when there's so many better options available? It would seem to make an interesting article for the FT or Economist.

[GuestHouse]

Have to agree with you regarding the Offshore Financial Product Salesmen. But the Product Providers (usually insurance companies) are just as guilty--of allowing their products to be sold by unregulated, unqualified, inexperienced, uninformed, and sometimes downright dishonest individuals.

A point to note - Financial Advisors selling/arranging transfers from UK based Pension to QROPS schemes are required to have a license to do so from the UK Finacial regulators. This is not the case with Off Shore 'financial advisors/salesmen'.

Something that is obviosuly not pointed out by people selling these deals in Thailand.

The points made about high fees and hidden fee structures are also very valid.

[MatthewM]

It is certainly concerning that there has been mis-selling of this scheme.

QROPS can be a very beneficial scheme for Expats, but should only be considered when somebody is sure that they will not be returning to live in the UK when they draw their pension, otherwise the extra tax implications would be of detriment to their pension.

Only people planning to live out their retirement away from the UK should consider QROPS.

[Misty]

A point to note - Financial Advisors selling/arranging transfers from UK based Pension to QROPS schemes are required to have a license to do so from the UK Finacial regulators. This is not the case with Off Shore 'financial advisors/salesmen'.

Something that is obviosuly not pointed out by people selling these deals in Thailand.

The points made about high fees and hidden fee structures are also very valid.

Interestingly in order to give investment advice or sell financial products in Thailand, the Offshore Salesmen are required by Thai law to have a license issued by the Ministry of Finance. Doesn't matter if the advice or sale is regarding products outside of Thailand.

Most or probably all of the Offshore Salesmen operating in Thailand don't have a license and are operating illegally. That they haven't been thrown out of Thailand as they were in Singapore is a function of the authorities not enforcing the law, not that the law doesn't exist. The Offshore Salesmen will say, "but I have a work permit," or "but the local authorities just don't understand what I do," or "but I'm a member of a Chamber of Commerce so of course I'm legit" etc etc, but none of these are reality.

What appears to be reality is that the local authorities don't care if foreigners give other foreigners bad advice and will only do something about it if someone complains.

Sadly this has resulted in all sorts of people setting up shop here. Many have quite clever marketing, and much of it is misleading, wrong, or out-and-out lies. The acid test is whether this stuff would be allowed in a well-regulated market.

[churchill]

A point to note - Financial Advisors selling/arranging transfers from UK based Pension to QROPS schemes are required to have a license to do so from the UK Finacial regulators. This is not the case with Off Shore 'financial advisors/salesmen'.

Something that is obviosuly not pointed out by people selling these deals in Thailand.

The points made about high fees and hidden fee structures are also very valid.

Interestingly in order to give investment advice or sell financial products in Thailand, the Offshore Salesmen are required by Thai law to have a license issued by the Ministry of Finance. Doesn't matter if the advice or sale is regarding products outside of Thailand.

Most or probably all of the Offshore Salesmen operating in Thailand don't have a license and are operating illegally. That they haven't been thrown out of Thailand as they were in Singapore is a function of the authorities not enforcing the law, not that the law doesn't exist. The Offshore Salesmen will say, "but I have a work permit," or "but the local authorities just don't understand what I do," or "but I'm a member of a Chamber of Commerce so of course I'm legit" etc etc, but none of these are reality.

What appears to be reality is that the local authorities don't care if foreigners give other foreigners bad advice and will only do something about it if someone complains.

Sadly this has resulted in all sorts of people setting up shop here. Many have quite clever marketing, and much of it is misleading, wrong, or out-and-out lies. The acid test is whether this stuff would be allowed in a well-regulated market.

Funds transferred via QROPS would only be transferred to an approved scheme - So they could not be transferred to Thailand - I am transferring using Scottish Provident in Hong Kong with the Trustees being Weir and Associates . Including the trustees set annual fee and the charges for Scottish Provident the annual charges will be less than I am paying Skandia in the UK . But I understand many companies are charging a lot more than this so shop around .

Edited July 8, 2008 by churchill

[JohnRea]

A point to note - Financial Advisors selling/arranging transfers from UK based Pension to QROPS schemes are required to have a license to do so from the UK Finacial regulators. This is not the case with Off Shore 'financial advisors/salesmen'.

Something that is obviosuly not pointed out by people selling these deals in Thailand.

The points made about high fees and hidden fee structures are also very valid.

Interestingly in order to give investment advice or sell financial products in Thailand, the Offshore Salesmen are required by Thai law to have a license issued by the Ministry of Finance. Doesn't matter if the advice or sale is regarding products outside of Thailand.

Most or probably all of the Offshore Salesmen operating in Thailand don't have a license and are operating illegally. That they haven't been thrown out of Thailand as they were in Singapore is a function of the authorities not enforcing the law, not that the law doesn't exist. The Offshore Salesmen will say, "but I have a work permit," or "but the local authorities just don't understand what I do," or "but I'm a member of a Chamber of Commerce so of course I'm legit" etc etc, but none of these are reality.

What appears to be reality is that the local authorities don't care if foreigners give other foreigners bad advice and will only do something about it if someone complains.

Sadly this has resulted in all sorts of people setting up shop here. Many have quite clever marketing, and much of it is misleading, wrong, or out-and-out lies. The acid test is whether this stuff would be allowed in a well-regulated market.

Funds transferred via QROPS would only be transferred to an approved scheme - So they could not be transferred to Thailand - I am transferring using Scottish Provident in Hong Kong with the Trustees being Weir and Associates . Including the trustees set annual fee and the charges for Scottish Provident the annual charges will be less than I am paying Skandia in the UK . But I understand many companies are charging a lot more than this so shop around .

Has anybody successfully set up a QROPS in Thailand ?

[JohnRea]

Can anyone advise on setting up a QROPS if retired in Thailand? Has anyone done so successfully?

[MatthewM]

I work for Credenda Associates here in Bangkok and we would only advise using Scottish Provident in Hong Kong to transfer to QROPS as it is highly regulated and because the fee structure is vary favourable to our clients.

As I mentioned before, please only consider QROPS if you have no intention of moving back to the UK.

[GuestHouse]

Can anyone advise on setting up a QROPS if retired in Thailand? Has anyone done so successfully?

If you are planning to do so I would suggest that you contact a financial advisor back in the UK. MathewM's point about Financial Advisors in Thailand being regulated is correct - But here's the important difference - Not any Financial Advisor in the UK can give advice and assistance in transferring pensions to a QROPs - They need certification specific to QROPs, this added to the legal protections offered within the UK financial regulation ought not to be disregarded.

Ask the financial advisor if they have this certification - very few do (correct me if I am wrong MatthewM but I think I am right in saying there are no financial advisors in Thailand who are certified by the UK Government to advise on and manage QROPs transfers)

(That's not to say MatthewM is not a fine upstanding honest professional - rather if you are planing to move your pension - by definition money you cannot afford to loose - then make that 'move' by using an organization in the UK where the legal framework is stacked in your favor and were legal redress is available should you need it. - OK there are laws and courts in Thailand.... but .... )

Edited July 9, 2008 by GuestHouse

[samran]

Can anyone advise on setting up a QROPS if retired in Thailand? Has anyone done so successfully?

As far as I undeerstand, all QROPS means is an overseas pension fund/superannuation scheme which is recognised by HM treasury.

This means that if you move away from the UK, and want your pension funds to follow you, then the pension scheme in your destination country must be recognised for the funds to be transferred.

To get recognition isn't easy I would think. First (I am assuming) you need to be a fund management company of large size and, presumably, of good standing both regulatory and otherwise.

We went through the whole QROPS thing as my wife an I both worked in the UK for just under 2 years. We were keen to move our small pension contributions back to either Australia or NZ, which is where we are both from. A large number of NZ based funds weren't even recognised with QROPS, so we had to opt for a large Australian pension fund, which has a market cap of $112billion and has over $120Billion in funds under management.

So if you are going to have a recognised QROPS in Thailand, you are going to have to have this sort of size and stature (not to mention regulatory framework) for you to get on the radar of HM Treasury!

[GuestHouse]

It's not just size and stature; the main criteria is that it has to offer broadly similar benefits as the pension scheme you are moving from and it has to reside within a tax regime accepted by the government.

You mention moving a pension that you had built up during a short-ish stay in the UK.

When I had my accountant look at QROPs for me (I have three occupational pensions and one private pension) he checked the fee rates and advised that it was only really worth considering for the larger of my pensions - the others being too small to make it worth move.

The others are not that small so check these cost benefits against your own fund size

[samran]

It's not just size and stature; the main criteria is that it has to offer broadly similar benefits as the pension scheme you are moving from and it has to reside within a tax regime accepted by the government.

You mention moving a pension that you had built up during a short-ish stay in the UK.

When I had my accountant look at QROPs for me (I have three occupational pensions and one private pension) he checked the fee rates and advised that it was only really worth considering for the larger of my pensions - the others being too small to make it worth move.

The others are not that small so check these cost benefits against your own fund size

Thanks for that.

AMP in Australia didn't mention the fees and they said they do this all the time. I'll check it out again, but I got the impression that it wasn't expensive.

[AFKAFSinLOS]

Personally I like the concept of QROPS compared to the inflexibility of UK pensions. Although the concept is good, I've been waiting around to find the right scheme with the right provider.

Finding a good financial advisor the world over is difficult. Not just Singapore and Thailand but the UK as well. My own view is educate yourself and the more you know the less you need an advisor and the more you realise they don't give best deals. I've yet to meet a financial advisor who can look after my money better than me...

The UK has had its fair share of investment scandals: Maxwell pensions, Reliance Mutual, general endowment misselling, with-profits schemes etc etc. So anyone believing they get a better deal there and just because it is the UK so safer, is mistaken. The fact that some people are abusing UK saving/investment schemes in transferring abroad is just another in a long line of UK relating mis-selling scandals. But then again the UK isn't alone on this...

As for Skandia, Generali, Scottish Provident etc, which seem to be the most common offshore sales vehicles, none of them look good value in my book. Better than doing nothing, and often can offer reasonable alternatives to UK pensions for expats, but no substitute for educating yourself and shopping around...

It also makes me laugh when people say they have talked to their accountant, solicitor, advisor etc. All of them might sound knowledgeable to someone who knows very little. But in reality they don't know much either...

[AFKAFSinLOS]

It's not just size and stature; the main criteria is that it has to offer broadly similar benefits as the pension scheme you are moving from and it has to reside within a tax regime accepted by the government.

You mention moving a pension that you had built up during a short-ish stay in the UK.

When I had my accountant look at QROPs for me (I have three occupational pensions and one private pension) he checked the fee rates and advised that it was only really worth considering for the larger of my pensions - the others being too small to make it worth move.

The others are not that small so check these cost benefits against your own fund size

Bear in mind that for many accountants/ advisors these days, it's safer to tell you just to stay put or not really advise you, even when actually not in your interests to do so. They're too scared of recommending anything that goes wrong because of what others in the industry do wrong. By definition investment products have risks...Unfortunately the ones that advise you to move are often more interested in themselves than advising you... so it becomes a bit of a no-win...

If you have 3 occupational pensions schemes, there's a good chance they are not with the same employer... Do some real research yourself. If defined benefit/ final schemes schemes they will likely grow at the lower of 2.5% p.a or inflation once you leave the company. That is not a good growth rate. Unfortunately the alternatives of transferring are not much better in many cases. If defined contribution, there are usually better deals if you shop around.

One of the biggest problems with UK pensions is inflexibility. This is brought home to many people when they change employers...

Having 4 schemes is a bit unfortunate for you, and you probably need to consider diversifying into other areas. The fact that 2 will likely be old schemes with previous employers will likely mean that they are poor value for money these days, but not much you can do about it. Poor if you leave them, poor if you move them. The acid test is would you take out the same plans today. In most cases people find their old schemes have been frozen, capped or have limited growth in some way... so they would not choose them at arms length if they didn't already have. A defined benefit scheme is great when you are with the company, and plan to be with them to close to retirement. I had one of the best I have ever seen. But once you leave....check the small print

[MatthewM]

Due to the fact that QROPS is a product that has to be very carefully considered and advised upon before taking out such a contract, I have decided to put a brief summary of the features available.

The QROPS contract would be taken out via HONG KONG institutions and therefore would be in accordance with HONG KONG regulations which are very strict and very much inline with the UK.

The legislation provides the following:

• Full portability to offshore locations from any UK pension fund where the beneficiary

is now non-resident in the UK.

• Full access to 100% of the funds, not just the normal 25% after a period of 5 years

overseas.

• Full access to 100% of the funds regardless of your age after a period of 5 years

overseas, you do not have to wait until age 55.

• Upon your death you can leave the entire balance to whomever you choose-It does

not end up in the governments coffers!

• You can manage assets where there is no tax on the capital growth of the pension

funds. This compares favourably with the UK that now taxes pension fund dividends.

We offer local access to an H.M. Revenue and Customs approved QROPS (Qualifying

Recognised Overseas Pension Scheme) provider.

Once again I would reiterate that full advise should be sort if you are considering QROPS and that only once you have all the options and information should you then make a decision.

I feel that due to the fact that everybodys individual circumstances are different that I would prefer not to answer questions on QROPS in the form of posts as I don't want people to misunderstand anything and make a wrong decision.

<<Name and number removed>>

[GuestHouse]

The UK has had its fair share of investment scandals: Maxwell pensions, Reliance Mutual, general endowment misselling, with-profits schemes etc etc. So anyone believing they get a better deal there and just because it is the UK so safer, is mistaken. The fact that some people are abusing UK saving/investment schemes in transferring abroad is just another in a long line of UK relating mis-selling scandals. But then again the UK isn't alone on this...

Indeed the UK has had the scandals to which you constantly refer - However the UK government also responded by changing laws relating to the regulation of the financial industry - and topically relating to pensions - These as you are aware as a direct response to the scandals and in particular in response to the Maxwell affair.

That asside - the reason why the UK government has pulled the plug on Singapore is because of irregularities in the running of QROPs schemes in Signapore - Read the posts and the link - Problems in Singapore NOT problems in the UK.

It also makes me laugh when people say they have talked to their accountant, solicitor, advisor etc. All of them might sound knowledgeable to someone who knows very little. But in reality they don't know much either...

Laugh away - meanwhile let me explain. I have asked for advice on the matter of QROPs and would it be in my best interest to move my pensions offshore. As stated by others I received of information and as stated by others the fee and charges structures where not at all clear - I would argue even hidden.

So I called up an Accountant and paid him to run the numbers for me, includnig the tax implications as I am still in employment.

For a relatively small fee I received a report that pointed out pitfalls not explained in any of the 'sales bumf' that is going around on this subject - So I think money well spent.

As an example I have mentioned the Cost/Benefits relating to the size of the funds being transferred - The funds I asked to be reviewed are of varying sizes but not 'small numbers' - That the accountant advised against moving the small funds on the basis of Cost/Benefit is telling - I don't know what other people's financial situation is, and I'm not about to give details of my own. But I would say that if I take one of the funds I was advised not to move and compare that with what I read here on TV about people's pension incomes then my 'guess' is that it is a reasonably large sum and one that others might be moving into QROPs.

Seems to me that the Financial Advisors pressing these schemes are all too eager to sell them and the reason for that is almost certainly the cut they get of the large fees.

[Misty]

Laugh away - meanwhile let me explain. I have asked for advice on the matter of QROPs and would it be in my best interest to move my pensions offshore. As stated by others I received of information and as stated by others the fee and charges structures where not at all clear - I would argue even hidden.

So I called up an Accountant and paid him to run the numbers for me, includnig the tax implications as I am still in employment.

For a relatively small fee I received a report that pointed out pitfalls not explained in any of the 'sales bumf' that is going around on this subject - So I think money well spent.

As an example I have mentioned the Cost/Benefits relating to the size of the funds being transferred - The funds I asked to be reviewed are of varying sizes but not 'small numbers' - That the accountant advised against moving the small funds on the basis of Cost/Benefit is telling - I don't know what other people's financial situation is, and I'm not about to give details of my own. But I would say that if I take one of the funds I was advised not to move and compare that with what I read here on TV about people's pension incomes then my 'guess' is that it is a reasonably large sum and one that others might be moving into QROPs.

Seems to me that the Financial Advisors pressing these schemes are all too eager to sell them and the reason for that is almost certainly the cut they get of the large fees.

I have to agree. In this case your accountant was acting as a true financial advisor, and the so-called "Financial Advisors" are simply salesmen looking for commission. A Salesman cannot give unbiased advise--there's an inherent conflict of interest involved when someone gets paid commission by a third party when they sell a product. So a Salesman is very different from an advisor. That's okay, as long as it's clear to the customer that they are in fact Salemen. The confusion comes in when Salesmen start calling themselves Advisors.

[AFKAFSinLOS]

The UK has had its fair share of investment scandals: Maxwell pensions, Reliance Mutual, general endowment misselling, with-profits schemes etc etc. So anyone believing they get a better deal there and just because it is the UK so safer, is mistaken. The fact that some people are abusing UK saving/investment schemes in transferring abroad is just another in a long line of UK relating mis-selling scandals. But then again the UK isn't alone on this...

Indeed the UK has had the scandals to which you constantly refer - However the UK government also responded by changing laws relating to the regulation of the financial industry - and topically relating to pensions - These as you are aware as a direct response to the scandals and in particular in response to the Maxwell affair.

That asside - the reason why the UK government has pulled the plug on Singapore is because of irregularities in the running of QROPs schemes in Signapore - Read the posts and the link - Problems in Singapore NOT problems in the UK.

Have read the post thanks and the link... Not sure why you feel the need to correct petty little items, but just to correct your little correction and humour your little games...

What I simply said is the UK like everywhere else has lots of these type of misselling scandals. The fact that some people now extend the scandals to UK related investments being transferred overseas (including Singapore) is hardly surprising... and an expected extension of mis-selling... At no point did I say the the problems were not in Singapore and elsewhere

BTW Your old pensions as checked out by your accountant... are exactly the type of thing that QROPS could be useful for, so well worth checking as you did... good move.

Just remember you've paid a fee. If he advises and helps with the transfer and it all goes well that's fine. If he advises and something unexpected goes wrong, whether it's his fault people hold them liable and cause them hassle. Hence given the focus on mis-selling there's a strong incentive for him to tell you to stay put and just collect the fee with no risk...

If he thinks the charges are prohibitive on your small amounts, the answer may be to find a better scheme with lower charges... Also as a UK based accountant, and given the schemes haven't got a long history, I'd doubt he's explored all the QROP options

Old definied benefit schemes from previous employers grow at very poor rates, which are quickly eroded by inflation, when compared to employees who remain in the company who benefit from salary increases each year. Depending on your age, proximity to retirement, and a host of other factors, you're exactly one of the type of people that could benefit if you find the right QROP provider...Just don't do it thru one of those mentioned in Singapore...and learn how to assess these things for yourself...Staying put may well be the best of a bad bunch of options... but that doesn't alter the fact what you have may not be very good and you should look at real alternatives...

Edited July 9, 2008 by AFKAFSinLOS

[MatthewM]

I feel that saying that all advisers are just salesman is a sweeping statement and unfair.

I realise that especially in Bangkok that certain unscrupulous advisers are not interested in their clients situation and just want to earn a quick buck, but there are legitimate advisers here who really want to do the best for their clients.

I spent 10 years in the very regulated UK market and I have always prided myself on my honesty and integrity.

After all the best form of business is refferal business and you don't get that from giving bad advice.

I would rather give up a sale than put someones financial security at risk.

Unfortunately there are many people in my industry that don't feel the same way as myself.

If an adviser does not go through a full-factfind and does not discuss your situation, your aspirations and your needs in-depth then walk away. I have met many people in Thailand that have said they have a 15 year savings plan at £xx per month and I would always ask why 15 years? amd why £xx? and they would say "that's what the adviser told me to do" which is wrong. The term and the monthly amount should be linked to accomplish a specific objective for the client not for the adviser.

I would really welcome UK regulation being adopted in Thailand as it would clean up the industry and make my job a lot easier.

[GuestHouse]

Like I say MatthewM, I do not doubt your professionalism and integrity one bit - But financial advisors in Thailand as a whole - well that's another story.

I've spent a great deal of time reading up on this QROPs issue, picked a couple of advisors and got a handful of recommendations - It is when I paid an accountant to run the numbers for me that the extent of the charges became apparent.

OK, I looked, checked and I'll look and check again later - But pick up the newspapers and magazines in Thailand and take a look at the 'advice' (I use the term loosely) being offered by Thailand based 'Financial Advisors' (and I use that term loosely too). It is quite clear that the QROPs scheme is being seen as a bonanza - Huge amounts of money in the hands of gullible expats ripe for plucking.

Take this with drawl of Qualification from Pensions administered in Singapore as an example. I'm quite sure that legitimate professionals in the financial services industry serving expats in Asia will see the UK Government's moves here in a positive light - It is in the best interests of the legitimate industry that Singapore brings these schemes back into conformance - It's also in the best interest of investors in QROPs and those considering investing (well perhaps a few guys are a tad un happy that they can no longer circumvent the rules in order to withdraw all their money and buy a house for their latest Teelak.. but that's back to what is in people's best interests).

However, just as I expect the legitimate financial advisors to welcome the UK Government forcing the Singaporeans to get their house in order (that after all is what is happening here) - I also fully expect to read some other Thailand based 'Financial Advisor' trumpeting this removal of Qualification in Singapore as a panic message to be used to frighten people into making a hasty decision.

Again MatthewM, if anything I have said seems to reflect on you personally I apologize without reservation.

[MatthewM]

Don't worry Guesthouse, I have not taken anything you have said personally.

As i said before there are too many cowboy financial advisers in Thailand that have affected too many people's lives. I will just make sure I am not one of them.

I have even been phoned by some offering me meetings. They obviously did not know my occupation and so I agreed to meet them. I will say that a couple of them offered me very good advice and were proffesional. The rest just wanted to sell me anything regardless of what my real needs should have been. Obviously I will not name individuals as I would never wish to get into a slanging match.

I am definately happy that the UK government acted in Singapore. I just wished they had more control elsewhere.

QROPS and any other financial product should never be entered into lightly. Wrong advice or decisions could seriously effect someones life permanently.

[GuestHouse]

QROPS and any other financial product should never be entered into lightly. Wrong advice or decisions could seriously effect someones life permanently.

I agree entirely, but I'd extend this to a lot of the other financial products being sold in Thailand - How many expats in Thailand I wonder put their pensions/savings into the stock market over the last two years because they were told they should be getting their life savings working for them, only to find this year their investments have lost them money they could not afford to loose?

... an observation, not an invite for people to tell us they made the smart move at the top of the market...

And the reason I mention that is, while financial advisors are one hazard in Thailand, believing other people's dreamed up glories is another.

Edited July 9, 2008 by GuestHouse

[Misty]

I feel that saying that all advisers are just salesman is a sweeping statement and unfair.

Hi Matthew, sorry, I wasn't trying to be unfair. I think the distinction between advisor and salesman is an important one. In some places there is actually a substantial legal differentiation made between the two. In the US advisors are legally required to work in the best interest of their clients, but salesmen are not. Investment advisers, fund managers, accountants, lawyers--all are considered to have fiduciary responsibilities to their clients. Salesmen and broker are not.

Advisors and salesmen are regulated differently, with advisors held to a much higher standard in regards to their responsibility to their clients.

I spent 10 years in the very regulated UK market and I have always prided myself on my honesty and integrity.

I appreciate that. It's not clear to me if there's a distinction made between advisors and salemen in the UK....maybe the two are blurred together?

I would rather give up a sale than put someones financial security at risk.

I can respect that as well. But is there anything requiring you (or anyone else in your position) to do so? Are there any consequences if you do not?

I would really welcome UK regulation being adopted in Thailand as it would clean up the industry and make my job a lot easier.

It sounds like you are in fact regulated here in Thailand. What are the differences between here and the UK? Anything specifically you'd like to see in the Thai regulations?

[MatthewM]

Hi Misty

In the UK, due to the regulations and exams required there are only advisers and not sales people. I'm not saying that some advisers in the UK don't step over the line but in general the regulations keep them under control.

The UK regulations that I would like to see in Thailand are the penalties for bad advice. In Thailand, as you rightly pointed out, there are no real consequences for mis-selling, where as in the UK their are heavy fines for the adviser and if its a more serious case the adviser can be banned from conducting any further business.

If they brought this kind of regulation into Thailand it would really help to clean up my industry. It would not happen over night but it would certainly be a step in the right direction.

[Paul MBMG]

Wow a lot of issues here

QROPS - the article that started this was about mis-seeling QROPS - here is MBMG'a latest take on that -

QROPS Update

It's been recently reported that HMRC is investigating a large number of (QROPS) in a crackdown that began last month in relation to Singapore-based trustees. As our QROPS expert, Bill Popham, has been keen to emphasise, the rules around QROPS are extremely advantageous for anyone who has a UK pensions and plans to retire overseas but these rules are clearly definied and any abuses of these will cause problems. That doesn't worry us because frankly there should be no need for abuses and we have ensured that we use reliable trustees and Isle of Man based custodians to ensure that our clients have QROPS that are, and will remain, compliant. Unfortunately, not everyone sees it that way and the inability of rogue trustees to comply has resulted in HMRC closely scrutinising schemes for potential abuses, with the axe hanging over hundreds of rogue QROPS.

The terms of a QROPS permit UK pensions to be transferred to international schemes and, after five years, no UK tax is payable on distributions, as long as those distributions comply with the Spirit of Co-operation agreement expected by HMRC. Sadly, we have seen instances where advisors have been promoting QROPS schemes on the basis that the entire pension pot could be withdrawn after 5 years. These so-called 'pension-busters' are clearly not complying with HMRC's required Spirit of Co-operation and we've been warning for sometime that this would end in tears.

HMRC refused to comment on particular schemes or jurisdictions that may follow those in Singapore in having their approved status stripped but said others were being probed. Singapore schemes that

lost QROPS status included one run by Panthera International Pensions Solutions, which is co-owned by Credit Suisse and Equity Trust.

Next issue - full report - EVERY professional QROPS analysis should contain a report like this as part of the service - any advisors not doing that are selling themselves and their clients short

Next issue - small schemes - in isolation maybe not, but there can be consolidations so you should look into those

Next issue - qualifications - any advisor assisting with QROPS should be suitably qualified - look for

FPC - Financial Planning Certificate, FPC 1 - Regulation and compliance, FPC 2 - Protection, savings and investment products, FPC 3 - Identifying and satisfying client needslists.

AFPC - Advanced Financial Planning Certificate

G10 - Taxation and Trusts

G20 - Personal Investment Planning

G30 - Business Financial Planning

G60 - Pensions

G70 - Long-term care, life and health protection

G80 - Investment Portfolio Management

H15 - Sales and Supervision Management

H25 - Holistic Financial Planning

K10 - Retirement Options

K20 - Pension Investment Options

AFPC G60 is the really key one here - check that your Thai based advisory company has access to this

Next issue - Thailand - there is licensing for financial advisory businesses but none of the licensing is as relevant to QROPS as G60.

MBMG were part of a committee of (as I recall) 3 companies that tried to offshore introduce licensing criteria for financial and insurance businesses in Thailand. However that fell apart due to a lack of general support from the rest of the industry here - I can check my records for who the other orgnisations were if that is of interest to anyone - to me that would be a huge point - not that 3 of us decided that we wanted to set a framework but that 20+ advisors decided that they didn't. Since that time MBMG has regulated its businesses appropriately in Thailand but also sought to comply with higher levels of regulations where these are appropriate (most of our client portfolios are GFSC regulated although one size doesn't fit all which is one of the difficulty with offshore regulations).

Yes, that part of the financial services industry here that operates 'under the radar' does get a bad reputation for the rest of it but that is true of many professions in Thailand - you can be an accountant (but not auditor) without qualifications, you can be a lawyer (and even put up 'the scales' symbol) without a license, many even lend money or act as brokers without licenses. In Thailand it comes down to the inidividual as to whether they choose to comply with more relevant voluntary licensing from overseas or not. That is how you differentiate. There are some very good advisors practising in Thailand and for the professional ones it's a huge problem, as MatthewM pointed out, that the industry here is such a curate's egg. Still it's bene that way all the 15 years that I've been here and the good guys do survive and prosper and the bad ones tend to move on within a few years - but it's the damage that they do in that time that hurts the reputation of the industry and also, more importantly, hamrs clients.

Sorry for such a long post,

Paul

[Paul MBMG]

and you may or may not have seen this(I've edited content to cut down the size!!)

Attempts to block UK pension rules that allow for the transfer of retirement funds to foreign jurisdictions via tax-efficient schemes, amid complaints that the rich are flooding through loopholes, are tantamount to “hysteria,” according to Speechly Bircham, a City of London-based law firm, commenting after a number of protests at the pensions arrangements, including claims that hundreds of millions of pounds are being diverted to foreign jurisdictions, culminating in Lord Oakeshott, a Liberal Democrat Treasury spokesman, demanding that the UK Treasury “stamp out” this concession. “When you have pumped up your pension pot with top-rate tax relief you can't then cheat the taxpayer by sailing off into a tax haven sunset to draw your pension”

European Union law permits intra EU pension transfers. As a result, HMRC had to consent to the introduction of transfer guidelines following the introduction of the new pension regime in April 2006. The key is that HMRC has to approve individual transfers to Qualifying Recognised Offshore Pension Schemes (QROPS). The QROPS rules approved by HMRC will not throw UK pension scheme rules out of the window though some country local variations will apply.The rate of tax applicable in some other jurisdictions is lower than the UK. This includes Cyprus which levies 5 percent tax on pensions payments.

A five-year rule is in place to ensure that the transfers are secured in the recipient scheme for that period. Otherwise UK tax relief accorded can be clawed back on the early movement of funds. At the same time, the UK legal obligation to buy a pension from an annuity provider at the latest by age 75 is usually absent in overseas pension schemes and is attractive to many who can potentially draw down benefits from their fund (e.g. never buying an annuity) and bequeath the remaining fund at death. Despite considerable debate and attempts to remove the age 75 Rule from UK pensions, it remains in place and if it was removed then there is the prospect for HMRC of Inheritance Tax at death rather than the annuity monies being absorbed (with little or minor taxable prospect) by an authorised pension provider.

The fallacy is always that the wealthy will be the only beneficiaries of the system. But many with modest pension funds that retire to Thailand for example may wish to transfer their pension fund as is their legal right. HMRC has always quite properly penalised those who attempt to defraud HMRC by agreeing to flawed arrangements to permit pensions assets to be sent offshore, Mr Chrystie added. Those who have signed-up to what are clearly 'imaginative' UK employments, sometimes for an alleged period of a week, have found that HMRC rigorously pursues them.

Speechly Bircham commented that perhaps HMRC and other Government agencies should have more effectively supervised some elements of the life assurance industry and other pension providers who have provided poor value for so many UK clients - “Is it surprising that so many people seem to have lost confidence in UK pension delivery and opt to transfer their pensions especially if they have decided to live outside the UK?”.

[cclub75]

Attempts to block UK pension rules that allow for the transfer of retirement funds to foreign jurisdictions via tax-efficient schemes, amid complaints that the rich are flooding through loopholes, are tantamount to “hysteria,”

Don't forget that beyond the "hysteria" there is one very basic truth : the british gvt is broke.

(read Europe rebuke as UK breaks budget deficit ceiling)

When the situation is worsening, you can be sure that the all the Einstein of Revenue Dpt will do whatever they can to... find money.

Everywhere, and in many pockets.

This is exactly what's happening (and by the way, it's not a UK speciality... all european countries will do the same).

At one point, "normal" people will understand that the only way to be protected is to go off shore, totally. And reduce to the maximum any holdings/assets in countries like UK, France, Germany etc.

[Paul MBMG]

Attempts to block UK pension rules that allow for the transfer of retirement funds to foreign jurisdictions via tax-efficient schemes, amid complaints that the rich are flooding through loopholes, are tantamount to “hysteria,”

Don't forget that beyond the "hysteria" there is one very basic truth : the british gvt is broke.

(read Europe rebuke as UK breaks budget deficit ceiling)

When the situation is worsening, you can be sure that the all the Einstein of Revenue Dpt will do whatever they can to... find money.

Everywhere, and in many pockets.

This is exactly what's happening (and by the way, it's not a UK speciality... all european countries will do the same).

At one point, "normal" people will understand that the only way to be protected is to go off shore, totally. And reduce to the maximum any holdings/assets in countries like UK, France, Germany etc.

I agree and you can add the rset of EU, USA, Canada, Australia and New Zealand to that list too!

Paul