Warnings escalate over unregulated FAs in expat destinations

Published:  11 Jun at 6 PM
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In spite of media publicity and extensive regulator warnings, expat investors are at increasing risk of falling foul of unregulated and unqualified financial advisors peddling unsuitable offshore-based investment schemes.

The Lawyer magazine is the latest publication to pick up on the increased risk to expat investors, identified by an escalating number of complaints involving unqualified salesmen working on high commissions from offshore-based insurance and investment companies. According to the publication, the number of complaints is now unprecedented.

Investment advisors London and Colonial are also highlighting concerns over the deliberate mis-selling of pensions and QROPs by bogus FAs based in many world location sfavoured especially by retirees. Such advisors, it states, are exploiting a loophole allowing them to move expat investments into unregulated offshore products.

According to London and Colonial’s head of business development, unscrupulous financial advisorsare are moving their clients’ money from Self Invested Personal Pensions, (SIPPS) to questionable investment vehicles overseas which pay top-dollar commissions to the salesmen. Such investments are not regulated by Britain’s Financial Conduct Authority and there is no redress for duped investors.

Two popular expat destinations for Brits, Malaysia and the UAE, recently announced plans to regulate FAs working in the countries after media articles revealed that unqualified salesmen were preying on expats and nationals. Similar scams have been reported involving pensioners in Spain’s popular retirement communities.

Thailand’s major expat cities of Bangkok, Pattaya, Phuket and Chiang Mai are hotspots for blatant mis-selling by commission-hungry salesmen posing as legitimate FAs, with a British former accountant talked into investing his life savings in a Dublin property via a well-known Isle of Man insurance company’s insurance wrapper. He lost his investment when the Irish real estate market crashed, but is still being forced to pay for the tax wrapper he now knows is useless as he has no plans to return to the UK.
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