The best financial advice is the right advice for an individual situation
Every financial adviser has experienced it. A prospective client arrives with a solution already in mind.
Perhaps they have read an article online, spoken to another adviser, attended a seminar or been recommended a particular pension structure by a friend. They are not really looking for advice—they are looking for someone to implement the decision they have already made.
Sometimes the recommendation is perfectly appropriate. Sometimes it isn’t.
The difference between a sales organisation and an independent professional adviser is often demonstrated at that very moment.
Just Because You Can Doesn't Mean You Should
The financial services industry is constantly evolving. New products emerge, legislation changes and international pension rules become increasingly complex.
Professional advice should never begin with the question: ‘How do we make this happen?’ It should begin with: ‘Should this happen at all?’
The Growing Importance of Substance Over Form
Across Europe, regulators and tax authorities increasingly look beyond legal form to the commercial reality of an arrangement. Legitimate tax planning is entirely acceptable, but advisers should carefully distinguish this from structures whose commercial purpose may later be questioned.
Pension Transfers Deserve Particular Care
Cross-border pension transfers can provide genuine benefits, but the best financial advice should consider scheme rules, applicable legislation, double taxation agreements, local regulation, tax implications, succession planning, investment considerations and long-term objectives.
Independent Advice Means Being Prepared to Say No
Professional advisers are paid to exercise judgement, not simply complete transactions. Sometimes the most appropriate recommendation is not to transfer a pension.
Cross-border pension transfers can provide genuine benefits, but every recommendation should consider scheme rules, applicable legislation, double taxation agreements, local regulation, tax implications, succession planning, investment considerations and long-term objectives.
The Cost of Being Wrong
Pension advice has long-term consequences. Advisers should ask themselves: ‘Would I be entirely comfortable defending this advice ten years from now?’
Why Good Advisers Sometimes Lose Business
Professional integrity requires advisers to place suitability ahead of commercial opportunity. The easiest client to lose is often the client you should lose.
Due Diligence Is More Than a Compliance Exercise
A suitability report should be prepared on the assumption that it could one day be read by a regulator, tax authority, ombudsman, insurer or judge.
Online Discussions Are No Substitute for Advice
Online opinions can highlight issues, but every recommendation should be based on the client’s individual circumstances rather than social media commentary.
Our Philosophy
At Aisa International, we believe the best financial advice is independent advice measured by the quality of recommendations, not the number of transactions completed. If, after due diligence, we conclude a proposed arrangement cannot be robustly justified or is not in a client’s best interests, we will say so. Protecting clients has always been more important than completing transactions.
References
- OECD BEPS project and economic substance principles.
- Directive (EU) 2016/2341 (IORP II).
- Irish Revenue guidance on pensions and overseas transfers.
- Relevant Double Taxation Agreements.
