Question: As an expat, can I use my home country financial adviser for investment advice in the country I now live in?
Answer: Not exclusively. Even if your home country adviser has strong qualifications, they may not understand the local tax system or the legality of financial products where you live. You could lose your consumer protections.
As an expat, why is it important that your financial adviser has relevant and local qualifications? While the answer may seem obvious ‘Because I want my adviser to be qualified enough to advise me’, what if I told you there was an even more important issue to consider!
Why is it important that your financial adviser has relevant and local qualifications?
Because local qualifications ensure the adviser understands the specific tax laws and financial products of the country you’re living in. This goes beyond just being “qualified”—it’s about being relevantly qualified for your specific location.
Isn’t it enough that my adviser is highly qualified in another country, like the UK?
Not necessarily. Even if your adviser has strong UK qualifications, they may not understand the local tax system or financial products where you live. This can lead to mistakes and potentially serious consequences.
There is a difference between regulated, qualified financial advisers, especially in cross-border situations for expats. Learn more in this Financial Times article.
What’s the risk of using an adviser without local qualifications?
As an expat, the biggest risk is that Professional Indemnity (PI) insurance might not cover any advice they give. If something goes wrong, you may not be protected financially.
What is Professional Indemnity (PI) insurance?
It’s insurance that protects financial advisers against claims from clients for mistakes, bad advice, or negligence. It covers legal costs and compensation if a client loses money due to the adviser’s actions.
When can a PI insurance claim be denied?
If the adviser is not properly licensed or does not hold the required local qualifications, the insurance provider can view the advice as unauthorised and refuse to pay any claims.
What should I do before working with a financial adviser in the EU?
Ask for evidence of their local qualifications. A properly qualified adviser will have no issue providing proof they meet local requirements.
Are foreign qualifications ever useful?
Yes, as an expat, you especially have the need for cross-border advice or specialised topics like UK pensions. But they should complement, not replace, local qualifications.
Summary
In many cases, for example, British advisers from the UK often have very high levels of qualification, knowledge and experience related to the UK and its product and tax regime. But, without having qualifications required by the local regulator (that could often be of a lesser or equal standard to those already attained elsewhere) in the country where you live, there is an issue about not understanding local taxation or products which then relates to an even bigger problem, being whether PI covers the advice they give you.
Who is the best qualified local financial adviser in Czechia?
