QROPS Transfers – to German or Offshore Plans
QROPS transfers have been all the rage amongst often unethical and ruthless IFA companies across the globe. Usually offshore pension plans with horrendous cost structures (mostly caused by extremely high commission payments to the salespeople) have crippled many a pension capital transferred out of the UK. On top of that, more often than not high-risk investments like “autocallable notes” (a form of derivative investment usually reserved for very experienced institutional investors only with a high risk tolerance) have further depleted the transferred pension capital so that in some cases expats have lost half or more of their hard-saved pension capital. Many such cases and sad stories can be found for instance here.
Since we have a long track record of critically reporting on bad advice regarding offshore pension plans and QROPs transfers, we have been approached by a growing number of clients to help them organize a transfer of their UK pension pots or a transfer out of bad QROPS plans or SIPPs which they have been sold in the past. Many are concerned of what a hard Brexit can mean for their pension pots; others have learned from critical articles that there is a lot of bad/poor advice out there for QROPS transfers and seek something better. Fear is never a good advisor in finance, though. Even we as professional and experienced advisors cannot claim to have a better grasp of what the future may hold than anyone else for the status of the UK towards the EU after Brexit and whether the British pound will drop further in value compared to the euro or not. Yet for most people the additional uncertainties that exactly these issues bring into their pension planning and an ongoing currency volatility of a large share of their pension capital can be good reasons for transferring the pension capital out of the UK, even if that comes with some pecuniary losses. Peace of mind is an intrinsic value that should not be underestimated in pension planning
What we offer now is an entirely commission-free advice process for QROPS transfers. Neither high upfront commissions nor added hidden commission costs from expensive investments are going to deplete your pension capital when you work with CR&Cie.
If you are a resident in Germany and thinking about moving your GBP-based pension pots either to QROPS-compliant plans in Germany or to really trustworthy and transparent offshore pension plans, you need advice from a Germany-based independent advisor first and then from a UK-based advisor for the TVAS, without which no UK pension insurance scheme will be allowed to transfer your capital to another pension plan. Because since 2015 certain forms of pension transfers out of the UK into the QROPS-compliant pension plans of other nations usually require a TVAS (transfer value analysis) by a specially qualified independent advisor in the UK.
Our advice process follows the UK recommendation that we shall look entirely unbiased at the pension situation of an interested client and assume at the beginning that it is in the best interest of the client to leave his or her pension pot in the UK, specifically for DB (defined benefit) schemes. However, we understand that there can be other reasons for anyone who lives in Germany and plans to remain here (or at least within the Eurozone) for the foreseeable future to shift his UK-based pension towards one within the EU as explained above.
What is important – and this is what makes our advice process for QROPs so vastly different – is that interested clients receive a fair assessment of the value they are giving up with their existing pensions as compared to what they will invest in when transferring their pension capital out of existing plans in the UK. And they need to have a full understanding of the costs involved, too… something that too often has been hidden behind smokescreens at other IFA companies who sold overly expensive QROPS pension plans to unsuspecting expats.
Here is what we at Chambervelt, Rooselain and Cie. offer to expats in Germany considering a transfer of their pension capital from the UK to Germany or to an offshore location:
Step 1. A full assessment of your financial situation, including all existing investments and pension plans (and, strongly recommended also: your existing insurance coverage). This comes with a flat fee of around 780 to 1,170 EUR (depending on volume of the capital to be transferred and number of pension plans involved). This includes a full financial status, a personal investor-profile assessment (which guides us in finding a diversification of investments that really fits to your personality and your wishes and goals for the future). Coupled with this we shall then generate quotes from QROPS-compliant pension assurances both within Germany and offshore. These pension plans are commission-free plans entirely; there will be no hidden costs for you that reduce any chances of making a fair yield with your pension plans over time.
Step 2. For all pension capitals in excess of 30,000 GBP a full analysis is required by UK regulation through a UK-passed and specialized/accredited IFA. We have a cooperation with such a respected and experienced IFA in the UK that will deliver such an analysis and report for a flat fee of 1,700 GBP.
Our IFA partner’s services contain a Suitability Letter, which explains the pros and cons for you of such a transfer; a transfer value analysis (TVAS) report that explains the value of your existing pension plans in comparison to the options offered from our side in Germany or offshore; and a cashflow drawdown report and any ancillary documents as required for the advice to remain valid.
Step 3: After you have received all of the above, you have two options:
- You can decide to keep your pension plan in the UK. If you like you can authorize us then as your financial advisor to optimize the existing plan and manage your investments there against a yearly fee.
- Or you can decide to go ahead with the transfer. In this case we will prepare and process all necessary documents for the transfer of the capital until it has safely arrived at its new pension plan destination. We offer this for a fee of 1.5% of the capital to be transferred (which, in some cases, can be paid out of the capital transferred). And of course we can then also offer to manage the underlying investments for you for a yearly fee in the following years if such management is requested or recommendable.
If you compare our process to the many “offers” out there on numerous websites offering some form of QROPS advice or assistance, you will quickly find that our QROPs advice is much more transparent in both what we offer as advice and what we charge for this advice and services. There are no hidden fees and nasty surprises. And because fees are charged at each of the steps, the advice can remain unbiased and in your best interests rather than in the interests of those relying on large commissions from the transfer of capital out of the UK.
If you would like to get more information or a quote from our side, please contact us here.