Transferring Uk Private Pensions Offshore

[Faramond]

QROPS is not for everyone, and I would like to think that most IFA's would not set a client up with a QROPS if it didn't benefit them

As I mentioned you should first do some homework yourself and as Gambles advised, you should sit down with someone and complete an actuarial analysis and weigh up the pros and cons.

This discussion is just to answer any questions some people may have about QROPS. If someone out there is being sold the service wrongly, hopefully this will give them somewhere they can come and query the advice.

[Faramond]

Personally I think someone with a number of pensions scattered about, which accumulate all together to a fair sized pension. Who is married to a Thai wife and is intending on spending the rest of his days living in Thailand would be interested in looking at the benefits.

QROPS allows you to consolidate all your pensions and keep them under one roof. A one stop shop to take a tax free income from, and also set some provisions for your Thai wife if anything was to happen to you

If there were not benefits to doing this why would the HMRC pass such a law allowing Expats to transfer offshore.

It is up to the individual to say if it is the right thing for them once they have been given the facts and figures, as Gamble mentioned, the reasons i feel a person would go a head and set up a QROPS has not always been the reason they have done it.

Edited March 28, 2010 by Faramond

[Gambles]

Personally I think someone with a number of pensions scattered about, which accumulate all together to a fair sized pension. Who is married to a Thai wife and is intending on spending the rest of his days living in Thailand would be interested in looking at the benefits.

QROPS allows you to consolidate all your pensions and keep them under one roof. A one stop shop to take a tax free income from, and also set some provisions for your Thai wife if anything was to happen to you

If there were not benefits to doing this why would the HMRC pass such a law allowing Expats to transfer offshore.

It is up to the individual to say if it is the right thing for them once they have been given the facts and figures, as Gamble mentioned, the reasons i feel a person would go a head and set up a QROPS has not always been the reason they have done it.

spot on, F.

To me it's far more important that everyone here with a UK pension gets a detailed comparison performed than what GH knows about the personal lives of 3 of the people that he's encountered in Thailand. We all know that the quality of people in all walks of life is variable and that regulation is generally a way of setting minimum standards. Gh fails to point out that there are suitable qualifications that ethical advisors based in Thailand can maintain and also other ways, like Professional Indemnity Insurance, that potentially protect the client more comprehensively than taking advice from a UK-based and regulated advisor with no links to or accountability in Thailand. The big issue is the opportunity for anyone holding a UK pension and their right to individidually analyse this.

[GuestHouse]

QROPS is not for everyone, and I would like to think that most IFA's would not set a client up with a QROPS if it didn't benefit them

.

But a UK based IFA would be legally bound not to miss sell, and UK law provides compensation for miss sold pensions - You don't get that from your local Carpet Bagger - so yes you are right to hope that no miss selling takes place.

If there were not benefits to doing this why would the HMRC pass such a law allowing Expats to transfer offshore.

Surely if you work in the business you are aware that the UK Government were forced to revise the laws governing pensions to allow overseas Transfers in order to meet their Obligations under the Treaty of Rome with respect to removing barriers to the free movement of workers. The issue was bringing UK pension law into line with EU Law, nothing to do with passing a law because it had benefits for Pension holders.

One has to wonder.

[GuestHouse]

Gambles, Faramond, I agree any UK Citizen holding a Private or Company Pension who plans to retire in Thailand should take a look at QROPS.

Where I disagree is using local IFA, where a UK based IFA can do the same job while the Pension holder maintains the substantial legal and financial protections of UK law.

I also object to the Carpet Bagging that goes on, here on TV, over the Phone, Spam Email Shots and Foot in the Door visits.

And then there are the holes in the hard selling - all talk about positives, no talk about negatives, no talk about charges/commission made by the seller and dumb on the fact that other benefits are lost by transfer - or can be obtained without transfer.

[jesimps]

I have twice been told by established companies that I cannot transfer to a qrops because I am already in drawdown in a final salary pension scheme. Surely these companies wouldn't turn away my business if this wasn't the case.

Hi jesimps, it depends on the company and the trustee you are trying to transfer from. What happens is the company that you set the QROPS up with, first has to contact the company holding the pensions and ask them firstly if the pension can be transferred and if it can, obtain the transferable amount and the discharge paperwork. Final salary pensions can be transferred if the company allows it to. So with your case maybe the trustee or company said no

with final salary schemes most companies will allow the transfer just to get the liability off their books. They calculate how much they will transfer and they are usually generous with the amount and add incentives

also there may be benefits included in your final salary scheme that can not be transferred, and this may be the reason they are saying no. if there are benefits attached to the scheme i would recommend keeping it where it was

i could look into why if you wanted me to

Thanks for your advice but I'm not going to pursue this now. The companies I contacted said that a final salary pension in drawdown did not qualify for qrops transfer, they even sent me the relevant quote from the regulations. It looked pretty open and shut to me.

[wordchild]

I have a QROP,which I set up in Guernsey useing UK-based advisors, and I would echo some of which has already been said above; 1) they are clearly worth considering for a long-term ex-pat with a reasonable sized pension pot.

2) Guernsey does seem to be the best place to base it,for all sorts of reasons but ,not least, the range and expertise of the providors there. As others have said I would strongly suggest the use of a UK based and regulated IFA.

3) It is worth doing a bit of work yourself to understand the product before going anywhere near an IFA, it is really not that complicated ,and a level of understanding will help you sort out the b--shit from the good genuine advice which you will need.

4) watch the fees closely particularly those hidden in any investment product that you may be being sold along with the QROP. There can be huge upfront and ongoing commision charges hidden in the small print,or in the structure of the product; ask lots of questions about this as it can eat up a chunk of your fund . As a rule of thumb avoid anything called an "investment bond" (as opposed to a corporate or govt bond) or any product with an insurance wrapper ,these are often the most lucrative for the advisor but the poorest investment choices for you.

5) In my view , partly because of 4 it is worth keeping the investment management of the fund completely separate from (and outside the influence of ) the QROP provider (and maybe also the advisor) who helped you set up the fund.The QROP provider remains responsible solely for maintaining it, and reporting to the UK revenue (and the Guernsey regulator ) on the fund and you are free either to shop around (maybe useing a discount broker such as a Hargreaves Lansdown) for good low cost investment managemet eg trackers etc or to be your own investment manager. I do realize though this does require a little extra time and expertise which may not be suitable for all.

6) As others have said, an unforeseen return to the UK (within the 5 years) will severely restrict or wipe out the benefits of having a QROP but as long as you have played by the rules (with the fund) while you have been away the revenue will not penalize you additionaly. You basicaly return to where you started.

Edited March 29, 2010 by wordchild

[GuestHouse]

Thanks for sharing your experience Worldchild.

The point you make about charges and 'bundled deals' is a very valid one - This, as you point out, is where the "Advisors" make large commissions and the Pension Holder can risk loosing considerable amounts of money.

It would be interesting to hear from the local Carpet Baggers exactly what structures they are selling. QROPS need be nothing more than the wrapper - but I doubt very much that is what is being sold by most advisors in Thailand.

There's no percentage in them doing so.

[Gambles]

I have twice been told by established companies that I cannot transfer to a qrops because I am already in drawdown in a final salary pension scheme. Surely these companies wouldn't turn away my business if this wasn't the case.

Hi jesimps, it depends on the company and the trustee you are trying to transfer from. What happens is the company that you set the QROPS up with, first has to contact the company holding the pensions and ask them firstly if the pension can be transferred and if it can, obtain the transferable amount and the discharge paperwork. Final salary pensions can be transferred if the company allows it to. So with your case maybe the trustee or company said no

with final salary schemes most companies will allow the transfer just to get the liability off their books. They calculate how much they will transfer and they are usually generous with the amount and add incentives

also there may be benefits included in your final salary scheme that can not be transferred, and this may be the reason they are saying no. if there are benefits attached to the scheme i would recommend keeping it where it was

i could look into why if you wanted me to

Thanks for your advice but I'm not going to pursue this now. The companies I contacted said that a final salary pension in drawdown did not qualify for qrops transfer, they even sent me the relevant quote from the regulations. It looked pretty open and shut to me.

Dear Jessimps,

That's obviously entirely your choice and your prerogative BUT for the benefit of other occupational scheme members I would like to point out that the entitlement to transfer a scheme in payment is clear and that next year this becomes more of an obligation for trustees to comply with (as opposed to currently when it's at the discretion of the trustees - that said only one group of trustees have refused us so far when they have been faced with the correct extracts from the tax statutes.)

It's very frustrating that inexperienced advisors are giving incorrect advice on this. While that has already potentially adversely affected your own situation, I'm afraid that I can't allow this misconception to persist at the potential expense of other UK scheme members who might lose out on the opportunity to transfer because of such bad advice. A number of the other pension in payment transfers that we have arranged had previously also been given this bad advice because of the lack of QROPS experience among some of the IFAs here in Bangkok, but the advice is quite categorically wrong.

Thanks

Paul

Edited March 30, 2010 by Gambles

[Gambles]

Thanks for sharing your experience Worldchild.

The point you make about charges and 'bundled deals' is a very valid one - This, as you point out, is where the "Advisors" make large commissions and the Pension Holder can risk loosing considerable amounts of money.

It would be interesting to hear from the local Carpet Baggers exactly what structures they are selling. QROPS need be nothing more than the wrapper - but I doubt very much that is what is being sold by most advisors in Thailand.

There's no percentage in them doing so.

I can't speak for carpet baggers but from the professional service providers the potential range of services could include

acquisition and management of underlying assets by 3d parties - (no management costs if self-managed)

portfolio allocation by 3rd parties (no costs if self-managed)

platform provision (maintenance and dealing costs vary depending on the range of assets required)

trust provision (vary mainly depending on whether the trustees are genuinely independent service providers or whether they are an associated company of any of the service providers).

Bundling of charges in itself is not necessarily a bad thing - however it can be used in a way to increase the overall fees and to obfuscate. This is obviously a bad thing, when in fact the potential exists to use it to reduce fees. Thinking about this when you buy a new car you buy a bundled product and that's because it's far cheaper and more efficient to do it that way than to buy the parts individually (I wonder if anyone remembers the Fiat X 1/9 !) The real difficulty is that because cars are to some extent entities capable of direct comparison between each other, competitive forces can force down the prices. This is generally true in financial markets too which are becoming ever more efficient. However because financial advice is more bespoke, it becomes more difficult to benchmark. This is where advisors have a responsibility to ensure that they fully disclose all costs. Clearly unscrupulous advisors are not doing this. I share your frustrations at this because frankly it eventually must come out in the wash and when it does, if it's any different to a client's expectations then that will lead to frustrations and potentially black marks against the industry.

Sadly we see situations all too often where bundling has been effected by advisors in a non-transparent costly way, for whatever reason.

This damages the clients and damages the industry. It also damages the companies who do this. S

Sorry if I seem moralistic about this but having spent 16 years in this industry in Thailand building a business the right way, it frustrates me when I see short cuts and opportunistic profiteering. There are many advisors in Bangkok who go about things the right way - you can't stay in business for 15 years here unless you do. But there are also too many, I admit, who go about it the wrong way.

My main beef with GH is that while he makes many excellent points, I fear that he's guilty of 2 very broad generalizations:

1) It's best not to deal with Bangkok-based advisors because of the lack of perceived regulation upon them

2) It's safe to deal with UK-based advisors while in Bkk because of the UK regulations.

Both of these are wide of the mark:

1) Advisors in Bangkok can offer tax and economic advice. They generally can't legally offer investment management services without a license. This is why we don't undertake investment management ourselves which we believe is a specialised role performed best only by experts. If these managers are regulated, that should provide regulatory comfort.

The advisors can also subscribe to codes of ethics and standards that are at least as high than UK standards (for instance such advisors in Thailand are encouraged to apply for CFA membership which is generally recognised to be more stringent than passing any comparable UK qualifications.

2) UK advisors operating in Thailand are generally not covered by UK regulations when they do so and in many cases their professional indemnity insurance doesn't cover their activities. Seeking redress from a UK based advisor operating in Thailand is something that I am told is virtually impossible. Seeking redress from a reputable, established, Bangkok-based advisor, with suitable PII, should be much more straightforward (and at the end of the day I've never met anyone who doesn't make mistakes at some point)

I think that these issues of charges, of regulation, of misrepresentation, of accountability, hardselling techniques etc are interesting topics (I know that many organizations cold call and this is an understandable cause of annoyance too) and I've offered before and do so again now that we should convene a face to face forum where people can express their points if view, and, having nothing to hide, I'm very happy to participate and to see if other industry figures will also stand up there to be shot at as well. I suspect that those with most to hide are least likely to do so but to be honest it's not appropriate for me to comment on the work of any individual or any company. I'm only concerned to improve the industry and its perception.

Gambles, WorldChild, Faramond and GuestHouse on the same stage? Could be interesting and ultimately, despite our differences in expression I think that deep down it's the same things that we want - an honest, accountable, professional advisory industry in Thailand and also the same things that we abhor. Happy to host this if anyone's prepared to do it - could even run it as a webinar in conjunction with ThaiVisa if they would support it.

Cheers,

Paul

[wordchild]

I think the simple reason for using a UK based advisor or IFA is its easy to do ,even based in Asia, and you have a better chance to get good quality advice.

I dont know Gambles organization , and it maybe an exception , but I have seen examples of the work of a couple of Bangkok based advisors (who have done stuff for friends) and in these cases felt the advice to be poor bordering on the disgraceful.

The sad fact is that , as a tax-advantaged ex-pat, you are seen as fat and ripe for the picking by many in the expat focused financial services industry. Fee structures are often higher on "offshore" products and commisions paid to "offshore" advisors can be significantly higher than paid in the UK . There is still a high level of use , in the "offshore" market, of high fee products such as investment bonds and other bundled products whereas in the UK many of these products are no longer regarded as best practice because they offer such poor value.

Based on the evidence I have seen and the reports of others the quality of people in the Bangkok based IFA market is often poor. Pushers of highly lucrative (for them) products rather than people capable of giving well-rounded advice.

Again maybe Gambles is an exception here.(i am sure he will claim to be!)

The UK IFA community is not without its charlatans and sharks but it is reforming itself rapidly; partly because some those who have moved away from the old commision based system to the newer fee-based model seem to be winning and also partly, because of much belated regulatory pressure. Many practices that were common just a few years ago (and are still common "offshore") are now frowned upon by the better quality IFA,s. And , in any event, most of these practices ( eg payments to advisors by product providors out of the clients funds) will be outlawed completely in the UK post 2012. ( My slight fear is that this will lead to an influx of the worst of the UK IFAs into the "offshore" industry where they can try to carry on as before.)

I believe the best path for someone looking for financial advice from offshore is to seek out a quality, fee-based ,UK based and regulated IFA .And, if you can, wait till 1/1/2013!

Edited March 30, 2010 by wordchild

[GuestHouse]

Gambles, my assumptions/generalizations are not as you say:

1) It's best not to deal with Bangkok-based advisors because of the lack of perceived regulation upon them

2) It's safe to deal with UK-based advisors while in Bkk because of the UK regulations.

It is simple, there is no legal regulation of Advisors in Thailand (statements about licenses etc ... Please, this is Thailand).

The UK has very rigorous financial laws added to which the UK also has regulatory bodies with teeth and advice/advocacy groups who can offer real expert help in sorting out miss selling of financial products. Not to mention legal aid for people who really loose everything.

Voluntary Codes of Practice have not worked in the UK - Hence the changes to UK financial services laws - They will not work in Thailand.

I absolutely agree with World Child.

I believe the best path for someone looking for financial advice from offshore is to seek out a quality, fee-based ,UK based and regulated IFA .And, if you can, wait till 1/1/2013!

By your own admission, Thailand's expat financial services industry has a significant problem with what you might refer to as unprofessional advisors - I call Carpet Baggers.

I take this view - My pension is more important than my job, I absolutely cannot afford to loose it - Why then would I risk it in the hands of someone over whom there are no legal controls, who has no indemnity insurance (and if they have I can't enforce a payment) and who is not subject to any oversight by any professional body?

No, I'll stick with a UK advisor - If he's a crook, an idiot of incompetent at least I'll have a course of legal redress that works.

[Faramond]

Well put in your last post Gambles, you come across as a very knowledgeable and honest financial advisor. I think even Guest House would agree

I wished all advisors in Thailand were the same, then maybe our industry would have a better reputation. But unfortunately as mentioned there are a lot of financial advisors conducting their business unprofessionally not only here but in the UK too.

There are two types of financial advisors as i see it, the first being the person who takes pride in being a financial advisor, someone who strives to give the best advice and has the clients interests at heart. Making sure that they do a good job for their clients and they are happy with the service provided, which leads to the client recommending you to other people, and building that way on your business. You will find that these people have a Financial background, are serious about what they do and feel its a privilege to have their clients trust them to manage their finances

The other type is probably what Guest House keeps referring to when he says "the carpet baggers", they are the salesman, personally I do not see these as financial advisors, and Gambles would probably say likewise, that a lot of clients we have picked up over the years are clients we have taken away from these salespeople, and rearranged what they have done and got clients investment working the right way.

It sounds like Guest House you have come across a few of these, but please do not tar us all with the same brush. There are a lot of professional advisors in Thailand who are just as frustrated at these salespeople. But you will find them in the UK too.

Guest House, I agree with you, your pension should be more important to you than your current job, it is your future source of income. Just by your posts I can see you have already done some research into QROPS yourself, and would probably agree there are benefits to Brits intending to stay overseas. Everyone should do their homework same as you, and if they feel they need to sit down with someone like an IFA to understand QROPS fully, just because it isn't the right thing for you, other people might find it a benefit

We have a UK Office that is FSA regulated, so after sitting down and doing the actuarial analysis and seeing if it does benefit them the client has the option of speaking further with our UK advisors and setting it up via them. What you do get is the benefit of having someone in the country you are residing that can offer a more personal service.

Reading Gambles posts I would recommend anyone that has any questions on their tax situation to take the opportunity while the expert is in town and attend their seminar next month. Gambles company does have a good reputation, and as i said he comes across as a very honest and knowledgeable person

[fletchsmile]

Guesthouse you always sound like a broken record on these threads. It gets boring hearing you slag off people you've never met, and make the same point again and again. You've made the same point several times on this thread alone. It's not even debate, it's simple boring rhetoric.

We all know that Thailand attracts more than its fair share of scam merchants compared to the UK, but the UK has scam merchants and bad advisors too. If you've ever been on the receiving end of bad advice or legislation in the UK, you will find it is far from perfect... and for your info no the UK protection doesn't always work.

Instead of basing your assumptions on the 3 advisors that you scarcely know, why don't you take Gambles or Faramond up on their offer to meet and discuss, instead of being completely rude to people you don't know. It's rather cowardly to watch you keep having a go at people you don't know even without any real subtance to your arguments. There are good and bad advisors in every country. I think they've actually been quite polite in answering your rudeness.

BTW Thailand does have qualifications that advisors can gain here. Just that you are not aware of them. Many IFAs maintain their membership qualifications thru professional bodies in the UK. Some will also be qualified accountants, tax planners, actuaries etc in addition to financial planners. All these have strong ethical bodies behind them.

While you have some knowledge of the UK pension industry, your global financial investment knowledge is actually very limited. People like Faramond and Gambles have something to say worth listening to, even if I don't always agree with it.

Personally I have yet to meet a financial advisor anywhere in the world that can manage my own money as well as myself in the manner I want on an overalll basis. For many people that's not the case, and you actually do a disservice to people who could use advice.

In addition, just because I'm happy with my own financial skillsets doesn't mean I can't learn from others like Gambles and Faramond. They actually have areas of expertise sometimes I don't.

BTW If I was to pick an advisor I would personally pick one I know, and whose office I could visit. Seeing as I live in Thailand at the moment it pays to take my head out of the sand and do some real research both here in Thailand and in Singapore. I wouldn't pick an IFA half way across the world in the UK where I visit for a holiday once every blue moon just because you think there is "real" protection there.

Edited March 30, 2010 by fletchsmile

[Gambles]

I think the simple reason for using a UK based advisor or IFA is its easy to do ,even based in Asia, and you have a better chance to get good quality advice.

I dont know Gambles organization , and it maybe an exception , but I have seen examples of the work of a couple of Bangkok based advisors (who have done stuff for friends) and in these cases felt the advice to be poor bordering on the disgraceful.

The sad fact is that , as a tax-advantaged ex-pat, you are seen as fat and ripe for the picking by many in the expat focused financial services industry. Fee structures are often higher on "offshore" products and commisions paid to "offshore" advisors can be significantly higher than paid in the UK . There is still a high level of use , in the "offshore" market, of high fee products such as investment bonds and other bundled products whereas in the UK many of these products are no longer regarded as best practice because they offer such poor value.

Based on the evidence I have seen and the reports of others the quality of people in the Bangkok based IFA market is often poor. Pushers of highly lucrative (for them) products rather than people capable of giving well-rounded advice.

Again maybe Gambles is an exception here.(i am sure he will claim to be!)

The UK IFA community is not without its charlatans and sharks but it is reforming itself rapidly; partly because some those who have moved away from the old commision based system to the newer fee-based model seem to be winning and also partly, because of much belated regulatory pressure. Many practices that were common just a few years ago (and are still common "offshore") are now frowned upon by the better quality IFA,s. And , in any event, most of these practices ( eg payments to advisors by product providors out of the clients funds) will be outlawed completely in the UK post 2012. ( My slight fear is that this will lead to an influx of the worst of the UK IFAs into the "offshore" industry where they can try to carry on as before.)

I believe the best path for someone looking for financial advice from offshore is to seek out a quality, fee-based ,UK based and regulated IFA .And, if you can, wait till 1/1/2013!

There's a lot in there that's hard to argue with except that I would say that in my experience the best quality local advice is more sophisticated and suitable than the best quality UK-based advice. Unfortunately because of the poor quality of the worst of the local advice, this sometimes gets lost. If it's not too strained a metaphor, when it comes to Bangkok-based advice it can be a much more beautiful baby than UK based advice but the bathwater here is definitely much dirtier. All the more reason not to throw the baby out with the bathwater.....

[GuestHouse]

Fletchsmile, that there are local qualifications or that a local FA has a wider understanding of global investment that I is irrelevant.

You are right, I hold a prejudiced view of Thai based FAs based on a my knowledge of three people, and of course the carpet bagging I come across on an almost daily basis.

But my prejudiced view is irrelevant too.

The issue is the lack of legal governance and the lack of compensation for miss selling - what ever the reasons for that miss selling might be, the lack of professional governance and the lack of help to people who need to fight thei way through the legal minefield when things do go wrong.

---

The stuck record here is Thailand based FA's touting their services here on this forum - They are clearly not telling the whole story, (see issue over being allowed personal pensions tax free if you've been out of the UK for ten years before claiming your pension).

But then the percentage is not in them discussing these downsides is it?!

Edited March 30, 2010 by GuestHouse

[Gambles]

Gambles, my assumptions/generalizations are not as you say:

1) It's best not to deal with Bangkok-based advisors because of the lack of perceived regulation upon them

2) It's safe to deal with UK-based advisors while in Bkk because of the UK regulations.

It is simple, there is no legal regulation of Advisors in Thailand (statements about licenses etc ... Please, this is Thailand).

The UK has very rigorous financial laws added to which the UK also has regulatory bodies with teeth and advice/advocacy groups who can offer real expert help in sorting out miss selling of financial products. Not to mention legal aid for people who really loose everything.

Voluntary Codes of Practice have not worked in the UK - Hence the changes to UK financial services laws - They will not work in Thailand.

I absolutely agree with World Child.

I believe the best path for someone looking for financial advice from offshore is to seek out a quality, fee-based ,UK based and regulated IFA .And, if you can, wait till 1/1/2013!

By your own admission, Thailand's expat financial services industry has a significant problem with what you might refer to as unprofessional advisors - I call Carpet Baggers.

I take this view - My pension is more important than my job, I absolutely cannot afford to loose it - Why then would I risk it in the hands of someone over whom there are no legal controls, who has no indemnity insurance (and if they have I can't enforce a payment) and who is not subject to any oversight by any professional body?

No, I'll stick with a UK advisor - If he's a crook, an idiot of incompetent at least I'll have a course of legal redress that works.

I think that you're missing the main point that in my experience in general if you deal in Thailand with a UK-based advisor you would usually have less protection not more than dealing with a Thai-based advisor:

1) UK regulations generally wouldn't cover such transactions

2) UK advisors are generally used to mainly dealing with UK residents

3) Legal redress against UK advisors in such circumstances is extremely difficult - recourse through Thai courts against a UK-based advisor is generally regarded as being pretty futile and redress through the UK courts is even more limited because of jurisdictive restrictions.

4) Local reputational concerns may be less important to UK-based advisors

5) Generally UK-advisor PII wouldn't cover advice given in Thailand

Compare this to a properly established local business

1) There are relevant regulations that cover international business - the FCA programme being perhaps the most stringent

2) Experienced offshore advisors should be the most suitable resource for international advice for Thai resident expats

3) Legal redress through the Thai courts should be reasonably straightforward if a fault or cause can be demonstrated

4) Local reputational issues are an important consideration

5) PII cover should be in place to cover any claims

I have had some experience of trying to help clients who came to us because they'd suffered a nightmare at the hands of advisors purporting to offer FSA regulated advice only for the FSA to refuse to investigate subsequent complaints because the advice given was outside their geographical remit.

I'm not knocking UK-based advisors - there are thousands of perfectly competent ones BUT it's not right to talk of greater security or protection; that's simply not the case. It's also not the solution to the problem. The problem is that the industry in Thailand ranges from absolutely outstanding to indescribable. The bar here needs to be raised. Hence my comment to Faramond when he originally posted his excellent and informative background to QROPS that the general industry here and specifically the QROPS advisory industry here has got plenty of room for good guys coming in and promoting the services in the right way like this. There's something wrong, albeit totally understandable, if the good guys get their heads chewed off for the sins of the bad guys. 16 years here and I'm not sure that we've solved this but we certainly could have used a few more good guys around several years back when the British Chamber of Commerce tried to encourage its member IFAs to adopt a voluntary Code of Conduct but only 4 organizations agreed to do so. It's a shame that Faramond wasn't here at that time - I'm sure from the things he says that he would have supported this kind of initiative, whereas it was shouted down by those few IFAs who seemed to feel that minimum standards was an unnecessary infringement on their rights to carry on giving sub-standard advice.....

[Gambles]

Well put in your last post Gambles, you come across as a very knowledgeable and honest financial advisor. I think even Guest House would agree

I wished all advisors in Thailand were the same, then maybe our industry would have a better reputation. But unfortunately as mentioned there are a lot of financial advisors conducting their business unprofessionally not only here but in the UK too.

There are two types of financial advisors as i see it, the first being the person who takes pride in being a financial advisor, someone who strives to give the best advice and has the clients interests at heart. Making sure that they do a good job for their clients and they are happy with the service provided, which leads to the client recommending you to other people, and building that way on your business. You will find that these people have a Financial background, are serious about what they do and feel its a privilege to have their clients trust them to manage their finances

The other type is probably what Guest House keeps referring to when he says "the carpet baggers", they are the salesman, personally I do not see these as financial advisors, and Gambles would probably say likewise, that a lot of clients we have picked up over the years are clients we have taken away from these salespeople, and rearranged what they have done and got clients investment working the right way.

It sounds like Guest House you have come across a few of these, but please do not tar us all with the same brush. There are a lot of professional advisors in Thailand who are just as frustrated at these salespeople. But you will find them in the UK too.

Guest House, I agree with you, your pension should be more important to you than your current job, it is your future source of income. Just by your posts I can see you have already done some research into QROPS yourself, and would probably agree there are benefits to Brits intending to stay overseas. Everyone should do their homework same as you, and if they feel they need to sit down with someone like an IFA to understand QROPS fully, just because it isn't the right thing for you, other people might find it a benefit

We have a UK Office that is FSA regulated, so after sitting down and doing the actuarial analysis and seeing if it does benefit them the client has the option of speaking further with our UK advisors and setting it up via them. What you do get is the benefit of having someone in the country you are residing that can offer a more personal service.

Reading Gambles posts I would recommend anyone that has any questions on their tax situation to take the opportunity while the expert is in town and attend their seminar next month. Gambles company does have a good reputation, and as i said he comes across as a very honest and knowledgeable person

Thanks Faramond - excellent analysis of the good versus the bad and the downright ugly in Bkk and the UK

Sadly we'll probably always get tarred with their brush to some extent but it is frustrating and at the end of the day, just keep on doijng everything that you can to make it better - I firmly believe that the cream always rises to the top!

[Gambles]

Guesthouse you always sound like a broken record on these threads. It gets boring hearing you slag off people you've never met, and make the same point again and again. You've made the same point several times on this thread alone. It's not even debate, it's simple boring rhetoric.

We all know that Thailand attracts more than its fair share of scam merchants compared to the UK, but the UK has scam merchants and bad advisors too. If you've ever been on the receiving end of bad advice or legislation in the UK, you will find it is far from perfect... and for your info no the UK protection doesn't always work.

Instead of basing your assumptions on the 3 advisors that you scarcely know, why don't you take Gambles or Faramond up on their offer to meet and discuss, instead of being completely rude to people you don't know. It's rather cowardly to watch you keep having a go at people you don't know even without any real subtance to your arguments. There are good and bad advisors in every country. I think they've actually been quite polite in answering your rudeness.

BTW Thailand does have qualifications that advisors can gain here. Just that you are not aware of them. Many IFAs maintain their membership qualifications thru professional bodies in the UK. Some will also be qualified accountants, tax planners, actuaries etc in addition to financial planners. All these have strong ethical bodies behind them.

While you have some knowledge of the UK pension industry, your global financial investment knowledge is actually very limited. People like Faramond and Gambles have something to say worth listening to, even if I don't always agree with it.

Personally I have yet to meet a financial advisor anywhere in the world that can manage my own money as well as myself in the manner I want on an overalll basis. For many people that's not the case, and you actually do a disservice to people who could use advice.

In addition, just because I'm happy with my own financial skillsets doesn't mean I can't learn from others like Gambles and Faramond. They actually have areas of expertise sometimes I don't.

BTW If I was to pick an advisor I would personally pick one I know, and whose office I could visit. Seeing as I live in Thailand at the moment it pays to take my head out of the sand and do some real research both here in Thailand and in Singapore. I wouldn't pick an IFA half way across the world in the UK where I visit for a holiday once every blue moon just because you think there is "real" protection there.

thanks Fletch

That's extremely balanced and realistic.

I hope this idea of a forum can go ahead because there are a lot of serious issues that deserve attention - fingers crossed that GH is up for it too!

[Gambles]

Fletchsmile, that there are local qualifications or that a local FA has a wider understanding of global investment that I is irrelevant.

You are right, I hold a prejudiced view of Thai based FAs based on a my knowledge of three people, and of course the carpet bagging I come across on an almost daily basis.

But my prejudiced view is irrelevant too.

The issue is the lack of legal governance and the lack of compensation for miss selling - what ever the reasons for that miss selling might be, the lack of professional governance and the lack of help to people who need to fight thei way through the legal minefield when things do go wrong.

---

The stuck record here is Thailand based FA's touting their services here on this forum - They are clearly not telling the whole story, (see issue over being allowed personal pensions tax free if you've been out of the UK for ten years before claiming your pension).

But then the percentage is not in them discussing these downsides is it?!

Not fair, GH.

I don't think that Faramond came on selling himself or his company as much as he was explaining QROPS...for myself let me say that whilst I'm obviously in business to make a profit, that is built around a long term strategy that has been developed over the last 16 years (FYI we earned a far greater amount in fee income and in performance fees last year than in commissions but I think that the choice of earning structure should be a decision made by the client in possession of full information and that there is no wrong or right) and my participation in this board is to encourage everyone with a UK pension to get an analysis done; this analysis will consider all aspects of potential tax treatment available to each member.

Also tax is not the only aspect that gets reviewed when we do a comparative analysis - there may be other pluses and minuses of QROPS. So if I'd said everyone should have a QROPS to save tax then yes your comment would be valid but I really don't believe that I've ever said that nor has Faramond nor any other professional advisor. The per centage as you put it is in giving the right advice and having a happy client for a long and mutually rewarding business relationship.

Cheers,

Paul

[chiang mai]

Three things to note:

1. You do not have to put your pension offshore in order to receive your pension tax free - UK tax laws allow anyone who has lived overseas for the ten years prior to drawing their pension to do so tax free (most the expats I work with who retire overseas make use of this clause to get their pensions tax free while still protected by the UK pension laws).

GH - can you provide a pointer/confirmation for this rule such as HMRC regulations etc, I can find no mention anywhere that such a rule exists and when I put the issue to a UK IFA a couple of days ago he replied that he has never heard of it before.

[fletchsmile]

Three things to note:

1. You do not have to put your pension offshore in order to receive your pension tax free - UK tax laws allow anyone who has lived overseas for the ten years prior to drawing their pension to do so tax free (most the expats I work with who retire overseas make use of this clause to get their pensions tax free while still protected by the UK pension laws).

GH - can you provide a pointer/confirmation for this rule such as HMRC regulations etc, I can find no mention anywhere that such a rule exists and when I put the issue to a UK IFA a couple of days ago he replied that he has never heard of it before.

Would also be interested in a reference to this. Particularly if it's applicable to Thailand.

I hope we're not getting into the realms of DTAs, as for Thailand SI 1981 No.1546 states that pensions paid to former government employees may permit double tax relief, however, most others don't.... including state pension....

[chiang mai]

Three things to note:

1. You do not have to put your pension offshore in order to receive your pension tax free - UK tax laws allow anyone who has lived overseas for the ten years prior to drawing their pension to do so tax free (most the expats I work with who retire overseas make use of this clause to get their pensions tax free while still protected by the UK pension laws).

GH - can you provide a pointer/confirmation for this rule such as HMRC regulations etc, I can find no mention anywhere that such a rule exists and when I put the issue to a UK IFA a couple of days ago he replied that he has never heard of it before.

Would also be interested in a reference to this. Particularly if it's applicable to Thailand.

I hope we're not getting into the realms of DTAs, as for Thailand SI 1981 No.1546 states that pensions paid to former government employees may permit double tax relief, however, most others don't.... including state pension....

I've exchanged PM's with GH on this point and we're awaiting a reply from one of his colleagues in order to clarify, early indications are that whilst the pension doesn't need to be offshore the owner does and in which case, tax paid is recouped via an I85, let's wait and see if anything further develops but I'm not hopeful.

[Gambles]

Three things to note:

1. You do not have to put your pension offshore in order to receive your pension tax free - UK tax laws allow anyone who has lived overseas for the ten years prior to drawing their pension to do so tax free (most the expats I work with who retire overseas make use of this clause to get their pensions tax free while still protected by the UK pension laws).

GH - can you provide a pointer/confirmation for this rule such as HMRC regulations etc, I can find no mention anywhere that such a rule exists and when I put the issue to a UK IFA a couple of days ago he replied that he has never heard of it before.

Would also be interested in a reference to this. Particularly if it's applicable to Thailand.

I hope we're not getting into the realms of DTAs, as for Thailand SI 1981 No.1546 states that pensions paid to former government employees may permit double tax relief, however, most others don't.... including state pension....

I'd have to put my hand up and say that I'm not aware of a general exclusion that can be universally applied, merely certain specific exclusions like the DTA provisions and other more limited specific provisions (and I worked for the Inland Revenue for a number of years). I'm not an expert however and so I'll check with Bill Popham but he's just taken his annual vacation and will be back 2 again w/c 19th April

[fletchsmile]

Three things to note:

1. You do not have to put your pension offshore in order to receive your pension tax free - UK tax laws allow anyone who has lived overseas for the ten years prior to drawing their pension to do so tax free (most the expats I work with who retire overseas make use of this clause to get their pensions tax free while still protected by the UK pension laws).

GH - can you provide a pointer/confirmation for this rule such as HMRC regulations etc, I can find no mention anywhere that such a rule exists and when I put the issue to a UK IFA a couple of days ago he replied that he has never heard of it before.

Would also be interested in a reference to this. Particularly if it's applicable to Thailand.

I hope we're not getting into the realms of DTAs, as for Thailand SI 1981 No.1546 states that pensions paid to former government employees may permit double tax relief, however, most others don't.... including state pension....

I've exchanged PM's with GH on this point and we're awaiting a reply from one of his colleagues in order to clarify, early indications are that whilst the pension doesn't need to be offshore the owner does and in which case, tax paid is recouped via an I85, let's wait and see if anything further develops but I'm not hopeful.

The silence is deafening on this one GH

And all that after throwing around so many insults too...

It seems more likely that reason advisors are not telling this to people is not because they're hiding it, but more because: at best it's not well known, more likely it's obscure and at worst it doesn't exist.

It seems like your expertise and your UK IFA seem to have gone quiet. Now if someone had a Thai financial advisor such as Faramond or Gambles they could just pop in for a chat and get some facts instead of waiting for a Christmas UK visit...

[fletchsmile]

Came across this thread again by accident while looking for another because of the new format of Thai Visa

Seems like Guest House's claims have turned out empty. Perhaps an apology is in order to the people he was insulting

Sounds like the Thailand guys knew what they were talking about and GH and his UK advisor are the ones that don't have a clue

Hopefully the bugs on the forum will also get sorted out soon - overall the site looks cleaner - just need the functionality to catch up!

Edited June 7, 2010 by fletchsmile

[rizla]

Three things to note:

1. You do not have to put your pension offshore in order to receive your pension tax free - UK tax laws allow anyone who has lived overseas for the ten years prior to drawing their pension to do so tax free (most the expats I work with who retire overseas make use of this clause to get their pensions tax free while still protected by the UK pension laws).

"Financial Advisors" selling QROPS out of Bangkok/elsewhere in Thailand are presumably targeting the market of people already overseas who have not yet drawn their pension - I've never heard any of them mention this clause .... wonder why not.

2. If you take your pension into a QROPS and are then forced to return back to the UK within five years of transfer you are liable to punitive tax penalties that would essentially wipe out your pension.

3. QROPS might be a good idea for you, but why use an unregulated "Financial Advisor" in Thailand when you can use a fully regulated advisor based in the UK?

I personally would not let any "Financial Advisor" in Thailand within sight of the £10 Premium bond my granny bought me for my tenth birthday - let alone let them near my pension.

Each and everyone of the laws governing Financial Advisors in the UK were brought in as a result of breaches of trust, criminality and huge losses by investors.

You'd have to be brain dead to forgo the protections offered to people using Financial Advisors in the UK for what passes as "Financial Advisors" in Bangkok.

Spot on mate.....i dont trust anyone to mess with my pension, it`s rather small and i preffer just o pay a small amount of tax on it in the uk, transfer it to I.O.M monthly and get at least tax free intrest on that....No such thing as a free lunch, from sales reps...you have been warned, by many guys here, dont jump in please..

[heebee]

Let me nail my colours to the wall right from the outset. I am an IFA, resident in Thailand for 13 years, holding qualifications from the CII and currently studying to upgrade those qualifications to an even higher level. You will notice that I am a recent member (joined to keep abreast of red shirt activity) and that my posts are few. I only post when I have something to say. I was whittling away some time between world cup matches when I came across this thread.

Never before have I come across such a mixture of ignorance, bigotry and mis-information. Where to start?

Faramond - you could try to moderate your language. You're putting yourself up there to be shot down. Losing 82% of your pension pot on death is technically correct, but would be very rarely applied. 82% pre-supposes a liability to Inheritance Tax. Otherwise, it might be 0% or 35% or 70%, dependent on age. Readers - if you don't how this might affect you find an adviser who does!

Faramond - "the income dies with you". Never heard of a spouse's pension? You really don't need to overstate your case.

Chiang Mai - "the tax man will have you in the most unpleasant way". Nonsense. Moving back to the UK with a QROPS is tax neutral as long as you declare the income under self-assessment.

Chiang Mai - HMRC6. Have you actually read the thing? If so, I would suggest reading it again and understanding it instead of using it to justify your earler poor post.

Readers - if you don't understand the tax implications find an adviser who does!

jesimps and others - one theme in this thread seems to be a lack of understanding of final salary salary schemes/employer pension schemes. A final salary scheme is an employer sponsored scheme, but not necessarily vice-versa. An employer scheme might also be a Contracted In Money Purchase Scheme, a Contracted Out Money Purchase Scheme, an Executive Pension Plan or any one of several other variations. Readers, if you do not understand the differences and how they might affect a QROPS transfer, find an adviser who does!

Another theme that seems to bubble under the surface may be a lack of understanding of the distinctions between Ordinarily Resident, Non Resident, Provisionally Non Resident, Domiciled and Non Domiciled. Time and time again, I meet UK nationals who consider themselves non-domiciled simply because they have lived outside the UK for a long time. Wrong and potentially a very expensive mistake. The recent Gaines-Cooper case severely muddied the water in respect of the 90 day and 180 day rules. An intimate knowledge of this subject is absolutely central to successful tax and investment planning for a UK expat. This is one area where a qualified and experienced Bangkok based adviser will get it right far more often than a UK based adviser. We deal with it every day. The average UK based adviser will come across this issue rarely, if ever. Readers - if you do not know your true tax status find an adviser who does!

Guesthouse - dear oh dear oh dear!! Your post 2010-03-28 09.49. Point 1. Complete and utter rubbish!!! Worse than that, this is dangerous. Where did you turn up this little gem of a doozy? Nana Plaza? Let's get the facts straight. UK pensions are UK sourced income and are, except for some former government employees, subject to income tax under the PAYE system and will be deducted at source by the pension provider. No hiding from it.

Guesthouse - Same post, Point 2. Once again, you are quoting from that great pool of mis-information - hearsay. You heard (correctly) about a five year restriction but display total ignorance of its implications and when it is applied. Your bigotry blinds you to facts. You should refrain from posting mis-information that could severely damage people. You, more than any other poster in this thread need to find an adviser who does!

Guesthouse - "I doubt very much that the vast majority of expats in Thailand who are being targetted by QROPS salesmen have sufficient funds in their pensions by age 50 to attain a sustainable early retirement". Perhaps not amongst your circle of acquaintances.

Guesthouse - I resent being defined as a "carpet bagger" in the same way that you would resent being defined as a sex tourist purely on the basis that you live in Thailand (I assume).

Gambles - you must have the patience of a saint to moderate your language when faced with with the vitriol of some of these people. We both know just how much lack of knowledge and mis-information exists amongst UK expats in respect of successfuI planning, but you must be as surprised as I am at some people's willingness to display it in a public forum. I am quite sure that this is part of your marketing mix, but you cannot reason with ignorance and bigotry. This is my first and last post in this thread. Please, stop dignifying them and do the same.

[chiang mai]

Let me nail my colours to the wall right from the outset. I am an IFA, resident in Thailand for 13 years, holding qualifications from the CII and currently studying to upgrade those qualifications to an even higher level. You will notice that I am a recent member (joined to keep abreast of red shirt activity) and that my posts are few. I only post when I have something to say. I was whittling away some time between world cup matches when I came across this thread.

Never before have I come across such a mixture of ignorance, bigotry and mis-information. Where to start?

Faramond - you could try to moderate your language. You're putting yourself up there to be shot down. Losing 82% of your pension pot on death is technically correct, but would be very rarely applied. 82% pre-supposes a liability to Inheritance Tax. Otherwise, it might be 0% or 35% or 70%, dependent on age. Readers - if you don't how this might affect you find an adviser who does!

Faramond - "the income dies with you". Never heard of a spouse's pension? You really don't need to overstate your case.

Chiang Mai - "the tax man will have you in the most unpleasant way". Nonsense. Moving back to the UK with a QROPS is tax neutral as long as you declare the income under self-assessment.

Chiang Mai - HMRC6. Have you actually read the thing? If so, I would suggest reading it again and understanding it instead of using it to justify your earler poor post.

Readers - if you don't understand the tax implications find an adviser who does!

jesimps and others - one theme in this thread seems to be a lack of understanding of final salary salary schemes/employer pension schemes. A final salary scheme is an employer sponsored scheme, but not necessarily vice-versa. An employer scheme might also be a Contracted In Money Purchase Scheme, a Contracted Out Money Purchase Scheme, an Executive Pension Plan or any one of several other variations. Readers, if you do not understand the differences and how they might affect a QROPS transfer, find an adviser who does!

Another theme that seems to bubble under the surface may be a lack of understanding of the distinctions between Ordinarily Resident, Non Resident, Provisionally Non Resident, Domiciled and Non Domiciled. Time and time again, I meet UK nationals who consider themselves non-domiciled simply because they have lived outside the UK for a long time. Wrong and potentially a very expensive mistake. The recent Gaines-Cooper case severely muddied the water in respect of the 90 day and 180 day rules. An intimate knowledge of this subject is absolutely central to successful tax and investment planning for a UK expat. This is one area where a qualified and experienced Bangkok based adviser will get it right far more often than a UK based adviser. We deal with it every day. The average UK based adviser will come across this issue rarely, if ever. Readers - if you do not know your true tax status find an adviser who does!

Guesthouse - dear oh dear oh dear!! Your post 2010-03-28 09.49. Point 1. Complete and utter rubbish!!! Worse than that, this is dangerous. Where did you turn up this little gem of a doozy? Nana Plaza? Let's get the facts straight. UK pensions are UK sourced income and are, except for some former government employees, subject to income tax under the PAYE system and will be deducted at source by the pension provider. No hiding from it.

Guesthouse - Same post, Point 2. Once again, you are quoting from that great pool of mis-information - hearsay. You heard (correctly) about a five year restriction but display total ignorance of its implications and when it is applied. Your bigotry blinds you to facts. You should refrain from posting mis-information that could severely damage people. You, more than any other poster in this thread need to find an adviser who does!

Guesthouse - "I doubt very much that the vast majority of expats in Thailand who are being targetted by QROPS salesmen have sufficient funds in their pensions by age 50 to attain a sustainable early retirement". Perhaps not amongst your circle of acquaintances.

Guesthouse - I resent being defined as a "carpet bagger" in the same way that you would resent being defined as a sex tourist purely on the basis that you live in Thailand (I assume).

Gambles - you must have the patience of a saint to moderate your language when faced with with the vitriol of some of these people. We both know just how much lack of knowledge and mis-information exists amongst UK expats in respect of successfuI planning, but you must be as surprised as I am at some people's willingness to display it in a public forum. I am quite sure that this is part of your marketing mix, but you cannot reason with ignorance and bigotry. This is my first and last post in this thread. Please, stop dignifying them and do the same.

As a marketing concept this is not a bad tactic - accuse everyone else of being an idiot and set yourself up as the resident "expert", brave and bold I say, should result in at least a couple of PM's and who knows, perhaps the odd bit of income, er I mean business!

[bowman]

uk pensions can be moved to offshure pension funds and be paid out in full market value if you have left the uk for good this is not bullshit it can be done

contact me for further info if required