Much has already been written about the Retail Distribution Review (RDR) and the impact it will have on expat retirement planning. However, new warnings are being issued by those in the industry.
The Retail Distribution Review has been devised by the UK Financial Services Authority and means that UK based Independent Financial Advisors will no longer be able to make their money on commissions from fund providers and life companies. Instead, IFAs will have to charge a fee although this can be taken from any returns on their clients’ investments.
The aim of the new rules is to ensure that IFAs recommend products based on value to their clients rather than simply those with the highest commision.
The RDR will apply to all United Kingdom Financial Services Authority regulated Independent Financial Advisors whether their clients are UK based or not and whether the products are UK based or not.
There may also be a secondary consequence that life companies can lower charges due to not having to pay out commision although it is unclear whether these savings will be passed on to consumers.
Needless to say, all expats are advised to seek out an expat focussed IFA to ensure that their retirement needs are met now and in the future.