Your UK Adviser Can’t Help You Anymore… What Now? Post-Brexit Financial Planning for Expats
With the UK’s departure from the EU, financially regulated “passporting” has ceased. For EU-resident UK expats, this means more complex banking and investment situations. Your UK-based adviser may no longer represent you legally. Even huge companies like St James Place have decided, on the whole, not to passport into the EU to represent their existing clients.
Understanding Passporting: How Does It Impact You as an Expat
In simple terms, passporting allows financial services firms authorized in one EU member state to operate in other EU states. This used to apply to UK financial services firms, but not anymore post-Brexit. For more information, you can refer to the Financial Conduct Authority’s (FCA) explanation on passporting.
For example, an Irish-based financial adviser can offer advice on investments or pensions to clients living in Spain without having to set up a separate business there – as long as they are qualified to do so and regulated in their home country. And this used to apply to UK financial services firms – until the B word came into play.
How Did Brexit Impact UK Financial Advisers Offering Advice to EU Clients?
UK financial services providers lost the ability to use passporting to access the EU, significantly impacting UK firms. Many restructured their businesses to continue operating within the EU, some relied on existing EU operations, while others sought local regulation in key markets. Another strategy involves reverse solicitation, where services are provided at the exclusive request of the client, not through direct solicitation. Some, like St James’s Place for example, just told their clients that they needed to find new representation. More details on this can be found on the European Commission’s website.
What Happens If Your UK-Based Financial Adviser Can’t Help You Overseas?
Even years after Brexit, you might receive notifications from financial services organizations informing you that they can no longer work with you due to regulatory changes. This could be because:
- Your adviser may not have been aware that you had moved overseas.
- Their local regulator status may have been rescinded.
- They may have closed their EU-based operation.
- You may have recently moved out of the UK or are planning an imminent move.
Financial Advice Based in the UK May Not Cover All Your Financial Needs
If you have investments in the UK, a UK-based adviser may still be able to provide support. However, it’s essential to consider if they are the best fit for your needs. For comprehensive advice, especially if you have EU-based savings and investments, consulting an adviser with local expertise in your new country is crucial.
Some EU countries have made it illegal for banks and insurance firms to do business with unauthorized providers. This trend may continue, further limiting opportunities for expats relying on UK-based advisers. For the latest updates, check the European Securities and Markets Authority (ESMA) announcements.
Changing Your Financial Adviser When Moving Overseas
If you have a trusted UK financial adviser, you might be reluctant to change. However, this change could provide an opportunity to reassess and optimize your financial arrangements for your new circumstances.
The Benefits of Choosing an International Financial Adviser When Moving Out of the UK
Reviewing your financial arrangements before moving can help minimize taxation and maximize tax-efficient opportunities in your new home. Holding UK savings and investments while living abroad may lead to higher tax liabilities. Exploring locally compliant alternatives can offer significant advantages, such as multi-currency and estate planning flexibility. The UK Government’s guidance on living abroad provides useful information on this topic.
Why You Need an Adviser with Local Knowledge
A UK-based adviser may be knowledgeable about the UK financial system but might not have the expertise needed for another country’s regulations. Thus, it’s essential to have an adviser who understands the local tax regime and how it interacts with UK taxation.
Should You Opt for a Local Adviser in Your New Country?
While a local adviser might have the necessary local knowledge, they may lack the expertise in managing UK assets or understanding expat-specific financial planning intricacies.
The Answer: An International Financial Adviser Specializing in Expat Financial Planning
An international financial adviser with expertise in both the UK and local financial markets can provide comprehensive advice, ensuring your financial affairs are compliant and optimized for your new life overseas. They can offer a global, personalized, and trustworthy relationship, transcending geographical boundaries.
You can read our entire blog about why you need an international financial adviser here.
How Do I Choose an International Financial Adviser?
Key considerations include:
- Ensuring the adviser is licensed to provide services in your country of residence.
- Checking they are familiar with local tax laws and cross-border financial planning.
- Ensuring they have an awareness of unique financial planning considerations for expats.
- Aligning their ethos with your long-term goals and objectives.
Successful expat financial planning strategies to discuss with your adviser include wealth accumulation, retirement planning, holistic financial planning, and tax-efficient investment options. For more detailed guidance, you can visit the UK Government’s financial advice for expats.
An International Financial Advice Solution That Will Provide You with the Best of Both Worlds
An international IFA will help you achieve financial peace of mind, allowing you to focus on enjoying your life in your new residence.
We’re expats ourselves, so we understand the unique financial needs of expats and are committed to being your partner in success. Backed by the OpesFidelio Group, we offer a bespoke, one-to-one personal service with the added benefit of a robust regulatory and compliance framework.
So, if your UK financial adviser can’t help because you live overseas, consider working with us. Let’s get started on your new financial journey.
Additional Resources for Expats
To further enhance your understanding and provide additional support, here are some useful resources for expats:
- Expat Network: A comprehensive resource offering guides and support for expats worldwide.
- Expatica: A resource for expats living in various European countries, providing news, information, and practical guides.
- Gov.uk – Living in Europe: Official UK government guidance on living in Europe, including healthcare, driving, and citizenship.
- The Local: News and information portal specifically for expats in Europe, covering various aspects of living abroad.
Planning for the Future
For expats, it’s not just about managing current finances but also planning for the future. Key areas to focus on include:
- Retirement Planning: Ensuring you have a robust retirement plan that takes into account the tax laws of your new country. Consider international pension schemes and how they interact with UK pensions.
- Estate Planning: Understanding the inheritance laws in your new country and how they differ from the UK. It might be necessary to update your will or set up trusts to protect your assets.
- Education Planning: If you have children, planning for their education is crucial. Look into international schools and university options and explore education savings plans available in your new country.
- Healthcare: Healthcare systems vary significantly around the world. Ensure you have adequate health insurance that covers you and your family in your new location.
Financial Products for Expats
Exploring financial products tailored for expats can also be beneficial. These might include:
- Multi-currency Accounts: Allowing you to hold and manage money in different currencies to avoid conversion fees.
- International Mortgages: If you plan to buy property abroad, look for mortgage products designed for expats.
- Expat Savings Accounts: These accounts often offer higher interest rates and additional features suitable for expats.
- Investment Opportunities: Look for investment opportunities that offer tax efficiency and are compliant with local regulations.
Staying Informed
Staying updated with the latest regulations and financial news is crucial for expats. Subscribing to financial newsletters, joining expat forums, and following relevant financial blogs can help you stay informed and make better financial decisions.
Conclusion
Navigating post-Brexit financial planning as an expat can be challenging, but with the right advice and resources, you can manage your finances effectively. By choosing an international financial adviser with expertise in both UK and local markets, you can ensure your financial arrangements are optimized for your new circumstances. Remember to stay informed, plan for the future, and explore financial products tailored for expats to make the most of your new life abroad.