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How to make sure you are getting the best QROPS advice

October 29, 2009

If you have some difficult financial decisions to make about pensions, investments and retirement, you need to have some yardstick to measure the quality of the advice you are receiving.

Anyone can Google ‘QROPS’ and come back with 78,000 search responses in 0.27 seconds.

Now the problem is sorting the relevant information about a QROPS - a Qualifying Recognised Overseas Pension Scheme - from the irrelevant.

Out on the web are a huge number of experts offering good, bad and ugly advice - but how does someone without any financial training tell the difference?

The questions you need to ask yourself before acting on financial advice are:

  • Does the Financial Services Authority regulate your advisor in the UK?
  • Is your advisor qualified and experienced in arranging QROPS transfers?
  • Can the advisor give whole of the market advice or are they tied to products offered by a limited number of providers?

Satisfactory answers to these three questions at least ensure you are dealing with an advisor that should have a level of knowledge to give ‘best advice’ about a QROPS.

Next, you need to look at who is managing your money. With most QROPS, come three options:

  • DIY fund management
  • Working with fund manager to make joint decisions
  • Letting your fund manager make all the investment decisions

Trust and performance are the issues here. If you have substantial investments in complex financial products, you probably don’t have the time or inclination to manage the funds yourself.

So you need to have confidence in the fund manager’s track judgement - but making this decision is not easy as people move jobs and financial companies consolidate after the recession.

Age is also a consideration. An older fund manager probably has been through recession before and has a set of tried and tested skills to rely on, but is that approach now dated and unlikely to pump up the profits on your investments. On the other hand, a younger fund manager may have different attitudes towards investing in a downturn.

How to manage funds has no real answer. The truth is no one can predict the future and all you can do is make sensible investment decisions based on … well, if we knew the answer, we’d all be rich!