QROPS Crack Down Impacts on Wealth Firm Sales

By Retirement
QROPS Crack Down Impacts on Wealth Firm Sales

The financial effects of a tax crack down on some expat pensions are just starting to show as some companies start to release their third quarter figures.

Skandia International – now trading as Old Mutual Wealth – saw annual premium equivalent (APE) sales drop 24% to £45 million in the quarter ending September 30, compared with £59 million in the same period 12 months earlier.

The figures do not include enough detail to show whether the fall was due to HM Revenue & Customs closing the firm’s Guernsey QROPS pension arm – but the management agree this action certainly affected sales.

Concept Group (Skandia’s partner provider) had QROPS listed among just over 300 closed Guernsey schemes by HMRC for not complying with the QROPS rules.

QROPS expat pensions

Most of the Channel Island’s expats pensions are still closed to non-resident investors. Other jurisdictions that suffered QROPS closures at the time included New Zealand and the Isle of Man. HMRC has also delisted all Cyprus QROPS as well.

QROPS expat pensions in other popular financial centres, like Malta and Gibraltar were unaffected.

“International APE sales were impacted by the HMRC restriction on qualifying recognised overseas pension schemes. A new structure was successfully implemented in Malta in Q3 2012 and some recovery in sales performance is expected in Q4,” said the company in a statement.

Gross sales in the third quarter dropped 20% to £0.4 billion, down 20% from £0.5 billion in the same quarter last year.

Funds under management also slipped from the second to third quarter – but this was because Skandia sold a business Finland that was responsible for almost the complete fall.

Confusion over merger

Paul Feeney, the Old Mutual Wealth CEO explained customers and advisers were confused the merger of Skandia UK, Skandia International, Old Mutual Global Investors and Skandia European businesses in to a single firm called Old Mutual Wealth.

Meanwhile, the Nordic Skandia companies were still trading under the brand.

“There have been some confusing reports recently about what the merger of the Skandia businesses into Old Mutual Wealth means, so let me be clear. Our aim is to be a provider of wealth management solutions to financial advisers and their customers. Their needs remain at the core of our business and we will support them whether they choose to offer whole of market or restricted market propositions, or both,” he said.

The Skandia announcement is a rare glimpse behind the corporate veil giving some indication of QROPS sales figures, as many of the providers are not required to supply breakdowns in their accounts.

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