One of the most common enquiries our Technical Services helpdesk team took in 2021, and a question that’s still very common as we’re now well into the year 2022, is from advisers who want to provide advice to their clients who are based in EU countries and (less frequently) in other parts of the world.

    Our advice to those advisers who want to provide financial advice and services to a client living outside the UK and EU has always been the same, pre and post-Brexit. That is, to think very carefully before giving advice. There are several factors to consider, not least:

    • Would the practice Professional Indemnity policy cover such advice?
    • How will the firm obtain permission/ authority to give advice from the local regulatory body?
    • How would an adviser be able to demonstrate their competence to give advice in a country where the taxation and legal legislation may be very different indeed to that of the UK?

    For that reason, only firms who are specialists in this area tend to be able to provide a financially viable proposition.

    Providing advice to clients in EU countries

    For those advisers who still want to provide advice to their clients, who have perhaps retired to EU countries, how has Brexit changed our advice to them?

    Well, until 31 December 2020 firms, when the UK left the European Union, UK firms that wanted to provide advice to their clients based in the EU were able to seek from the FCA a ‘passport’. This was a relatively straightforward application to the FCA.

    Passporting ended however when the UK left the EU. Any passports held by firms simply disappeared from the FCA register (although passporting for Gibraltar remained in place until the end of 2021).

    Regardless of this, firms may still have clients living in EU countries who expect and want to receive advice from their UK-based advisers.

    Our advice to them, after careful research into the FCA rulebook and EU Regulations, is that advisers should only provide advice to their clients, when their clients are present on UK soil.  

    If a firm wants to provide advice when the client is not on UK soil at the time the advice is being given, then the same guidance that we give for the rest of the world applies - that is, before advice can be given the firm would need to seek permission/ approval from the local regulatory body.

    While the UK Regulator is only responsible for the regulation of advice given in the UK by firms it has authorised, we believe that they would act on any reports that involved a UK firm providing advice to a client who was not on UK soil (regardless of their nationality or residency). This report could be received by the FCA from the client themselves, or from the EU country’s regulatory authority.

    If firms do want to seek permission from A. N Other regulatory authority, then the same considerations apply as for non-EU territories. How would the PI insurers underwrite such a risk if local regulatory permissions were obtained? And, equally importantly, how will the adviser demonstrate their competence to give advice in a country where the taxation aspects of financial planning may be unfamiliar to them as well as the legal framework which would apply to the advice being given?

    One other question that we are also being frequently asked, perhaps due more to the pandemic than Brexit, is “Can a UK adviser in a UK regulated firm give advice when they themselves may be based outside of the UK?”.

    Here, we believe, the answer is more straightforward.  

    We believe that an adviser who is regulated by the FCA through a firm that is UK authorised and  based in the UK can give advice when they are not on UK soil themselves. Think of it like this, an adviser who is on holiday has to interrupt their break to help a client in a time of need. The location of the adviser isn’t of any concern to the client needing assistance, and the advice would be subject to all the usual FCA rules and expectations.

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