FEAR+FRAUD. Does Geneva= Gibraltar? Are SIPPs the new QROPS?

 

This bog is about fear and how it can be used by the unscrupulous to frighten them into putting their retirement at risk. The unscrupulous fear-monger is the self-appointed UKPension Guru (Clive Skane-Davis) of Swiss Global Consulting; you can see his CV at https://www.linkedin.com/in/cliveskanedavis/.

Any resemblance to the other Pension Guru (Steve Bee) is entirely intentional, Skane-Davis’ tactics are to mimic and pervert honest endeavour for self-serving intent.


Plausibility assured.

The targets of this intent are expatriate Brits moving to Switzerland with pension rights in the UK. Here is the pitch

UK PensionGuru is for anyone living outside the UK that still has pensions in UK schemes, especially those with ‘frozen’ Final Salary pensions.

If you question this, you can find out more https://www.ukpensionguru.com/#questions

Pension funds in the UK are in major trouble as the promises made cannot be met and upheld. Out of 5,945 schemes 84% are in deficit and the average deficit is over 20%. That means that the scheme can only actually afford to pay you 80% of what it has promised. Unfortunately, in ‘buy-out’ terms (a straight forward assets verses liabilities calculation) funding of UK schemes is only 62% of liabilities!

Clicking the link gives us a “quote” from the PPF Chair Alan Rubebstein (sic)Slow speed car crash

Or should I say Alan Rubenstein, who made these two statements to the Daily Telegraph last year; http://www.telegraph.co.uk/pensions-retirement/news/my-company-pension-paid-70000—now-it-pays-just-17500/


A litany of half-truths

What follows is UK PensionGuru’s answers to the expat’s frequently asked questions, answers littered with half truths culminating in the triumphant unveiling of UK PensionGuru’s four UK Pension myths.

Myth 1. Final Salary/Defined Benefit pensions are guaranteed

“The only real guarantee with Final Salary Schemes is that they will go bust”

Myth 2. The Government PPF (Pension Protection Fund) will bail the scheme out if there is a problem

“There is no ‘Government Fund’, it doesn’t exist, and the worst part is that the PPF is itself in deficit. So now the Lifeboat is sinking as well”.

Myth 3. A QROPS is the best vehicle for everyone living abroad

“there are other cost effective options to consider”

Myth 4. My Final Salary/Defined Benefit pension MUST pay me the benefits I am due!

People are finding out the truth every day and suffering drastically reduced pensions when it is too late to correct matters

UK PensionGuru is making these outrageous statements from the comfort of his offices in Geneva. But the worrying thing is that he is  extending arguments being put forward by pension gurus in the UK.

If you promote (as tPR/PPF/JLT/PWC regularly do) funding deficits based on a buy-out or gilts plus discount rate, you give ammunition to UK PensionGuru. This crass perversion of this scare-mongering is  (in part) down to irresponsible reporting of deficits. Indeed UK PensionGuru delights in quoting such authorities as his source.

The reporting of the PPF7800 and other collective deficit numbers without proper context is feeding the fraudsters with the bad-news stories they delight in!


Careless talk costs pensions

The allegation that the lifeboat is itself sinking is ludicrous and unsupported. The Daily Telegraph article “My company pension paid £70,000 , now it pays £17,500” contains many quotes from Alan Rubenstein, which in the context of the article are fuel to UK PensionGuru’s fire.

I am surprised that the Telegraph continue to host the article as it is neither balanced nor helpful. Those few executives whose pensions are reduced when their schemes enter the PPF are to be balanced by the hundreds of thousands of pensioners being paid by the PPF with great security at or around the promise of their defined benefit. And weighed against the vast majority of UK pensioners, deferred pensioners and those actively accruing defined benefits who will be paid their benefits in full.


So what of the solution (s)?

Clearly QROPS is no longer a catch all. UK PensionsGuru has two weapons of pension destruction- QROPS and SIPPs. Many of his expatriates will no longer be able to access a QROPS so- as he rightly points out – they may need to get tot he QROPS through another route. The SIPP becomes an  escape tunnel from which the QROPS may be launched later.

This is a complication brought about by HMRC reducing the numbers of recognised QROPS and by the budget’s 25% exit tax on transfers to most QROPS from UK pension arrangements (you can get the details by contacting UK PensionGuru)

Myth 3 suggests that the expatriate financial adviser is already finding ways round the rules, though whether such loopholes will stand the test of time is doubtful. Beware tax-avoidance measures, tax evasion is never far away.


Is the SIPP, the new QROPS?

Thanks to Chris Lean fro bringing my attention to the drivers behind this check out this advert on QROPS adviser zone http://qropsadviserzone.com/?page=articles&id=13

Highlights are mine

QROPS have become a lifeline for many companies and they have provided many financial advisors with a substantial income stream by offering a much sought after service that clients actually want.

QROPS transfers are, however, labour intensive and can often take many months to complete.

There is an alternative product that can provide a solution for both the client and the adviser.

A UK SIPP will provide some of the features that a QROPS would have provided such as consolidation of pension schemes, flexibility of benefits and greater access to investment products.

The transfer into a SIPP is invariably processed via the UK ORIGO system and more often than not this reduces considerably the transfer time from the ceding scheme to the SIPP.

Our SIPP is available to non-UK advisers and can provide a similar commission based revenue model to that which advisers have been used to within QROPS.

As Christopher comments “what could possibly go wrong?”.


Pension freedoms await

If you want a flavour of the nirvana awaiting you if you get as far as liberating your UK pensions, take a look at this lnfographic which appears on UK PensionGuru’s website.

Swiss global 1

If it looks too good to be true – it almost certainly is.


And what of Swiss Global Consultants?

It is registered as an adviser by the Swiss Financial Markets Supervisory Authority.

The business is managed and owned by Jonathan Berrar, and  Paul Kavanagh and has 61 people associated with it on Linked In. Most appear to be expat Brits with little experience in UK regulated financial services

A quick search on SGC’s offices suggests that they are in a building advertised as http://swiss-luxury-apartments.ch/ .

The business was set up in 2016 and incorporates Swiss Global Trustees and Swiss Global Holdings. With only 20,000SF as nominal capital, make your own mind up.


Further reading

https://www.moneyhouse.ch/en/company/swiss-global-consulting-sarl-10423561431/revenue#

https://www.finma.ch/en/#Order=4

https://www.linkedin.com/in/paulkavanagh3/

https://www.linkedin.com/in/jberrarswissglobalconsulting/

http://swissglobaltrustees.com/

https://swissglobalconsulting.com/

 

 

 

 

About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in pensions and tagged , , , , . Bookmark the permalink.

8 Responses to FEAR+FRAUD. Does Geneva= Gibraltar? Are SIPPs the new QROPS?

  1. Con Keating says:

    I hope this blog is picked up widely by the print and social media.

    Liked by 1 person

  2. Of concern to me, apart from the obvious points raised in the article, is that there will be a SIPP firm that is facilitating this “lifeline” to the one-trick pony QROPS firms, masquerading as IFAs.
    Rest assured, some bright sparks will be looking at how to exploit any loopholes after the Budget.

    Liked by 1 person

  3. Gerry Flynn says:

    Henry
    I had exactly the same problem here in Spain with a IFA from a well known “Wealth Management” company who wrote a blog last year that said that all final salary schemes were doomed and the PPF was going to be overwhelmed.

    Liked by 1 person

    • As an expat myself, I see the “wealth management” title used extensively by those that haven’t struggled past the out of date FPC exams from the 90s or, indeed, have never sat an exam more difficult than a GCSE. It is all about making the investor uncomfortable in order to get a sale.
      While the 7% to 12% commission may be handsome reward for the product sale (I will not call it advice), the cost of that sale to the pension scheme member, that cannot afford to lose the DB scheme guarantees in most cases, is off the scale in comparison.
      Leaving a final salary scheme is a very big decision and not a “No Brainer” as suggested by those with, well, no brain.

      Liked by 1 person

  4. By the way, Mr Clive Skane-Davies DipPFS does not appear to be a member of the CII. Maybe the CII member search is faulty?

    Does he have the Diploma exams? Whether or not, he cannot use the title unless a paid-up member, signed up to CPD and the CII code of conduct.

    http://www.cii.co.uk/web/app/membersearch/MemberSearch.aspx?endstem=1&q=n&n=Clive+Skane-Davis&c=&ch=0&p=0

    Liked by 1 person

  5. henry tapper says:

    For anything more than the commutable level (£30,000) , advice is needed and advice now has to take into account the suitability of the investment option. We should be very concerned about “small” DB transfers and DC aggregation.

    Liked by 1 person

  6. Eugen Neagu says:

    I thought these “financial advisers” have become a bit smarter and not use the old tricks like “UK pension system is bankrupt” anymore.

    A good financial adviser could look at Double taxation agreement between UK and Switzerland and find better tax planning, should he wants to recommend a defined benefit pension transfer. In some cases when there is a good transfer value involved and argument for a defined benefit transfer could be made.

    Liked by 1 person

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