Unlicensed Financial Advisors Are a Threat to UK and US Expats in Czechia

by | Sep 22, 2023

Unlicensed financial advisors are gambling with your money. 

Unlicensed financial advisors are encountered by thousands of people – mostly those from the US or UK – in the Czech Republic. While expats deal with a myriad of essential ‘start up’ requirements, their investments, savings, and future retirement planning can take a back seat. 

“Every US and UK expat coming to the Czech Republic should know how to safely manage their invested money while they live here. It is highly likely that these expats may encounter unregulated, unlicensed, and poor-quality cross-border financial advice,” says Chris Lean, Chief Investment Officer at Prague-based investment portfolio management firm Aisa International.

Unregulated advice can result in losses 

Investing money through an unlicensed advisor, or in an unlicensed fund, can leave an expat with a loss that will not be compensated by the Regulator of the Czech Republic. 

Advice can come from an unregulated adviser, or from an adviser who is regulated, but there could be an issue if the funds are unregulated. In either case, if the fund collapses, it is likely that the investor will have no recourse to the Regulator. Though the Regulator may take action against the adviser, it will not help the investor. 

Unlicensed, or unregulated advice is not covered by Professional Indemnity Insurance in the event of a claim, and it is likely that the unregulated adviser will not be able or willing to compensate investors for any losses they caused. 

Unregulated advisers have no obligation to follow rules on transparency of costs. They will usually be paid excessive fees, usually undisclosed to the investor.

Finally, unregulated products are not scrutinized by any regulator and are likely to be far more risky and more likely to fail.

Less-than-honest advertising 

 Where investment licenses are provided, the advice firm often has to prove a high level of capital adequacy (financial strength).  

A current advertiser has a goal to be ‘the leading financial services provider.’ However, our research shows they have less than €20,000 on their balance sheet. That is not enough for expats to safely consider investing through them. 

Firms often use subtle semantics to suggest they are licensed and regulated. All the licenses in the Czech Republic (as in the UK and other places) require the person responsible to have relevant qualifications. Advisors may boast about the qualifications they hold; however, they often are not relevant to the country where they are doing business. 

“We’ve seen this to be quite common: an American or British financial advisor will conduct their advisory services in the Czech Republic, with no Czech licenses or EU oversight at all,” explains Lean. 

Using insurance as a sales ploy 

Many times, firms will advertise that they provide Wealth Management Services. Often, the truth is, they are licensed through the Czech National Bank to only sell insurance. Wealth Management is a specific regulated activity. For this reason, firms licensed only for insurance cannot offer this, and they don’t in reality, as this is a regulatory breach. For this reason, clients of these advisors find that only insurance products are recommended to them. 

Many investors see the buzz around offshore insurance savings products in places like The Channel Islands, Bermuda, The Cayman Islands or the Isle of Man. These are probably financially stable products; in fact, some have been going for many years. 

But, critically, these are not recognized as insurance in this country – only those that underwrite risk or provide guarantees are approved for distribution in the Czech Republic, the majority being offered by Czech insurance companies. Some advisors sell these unapproved products; however, the regulator here says these are not deemed to be insurance contracts. So, they must be investments. If so, the advice is not regulated if the adviser only has an insurance license. 

In this case, any ‘insurance product’ they sell is technically on the back of unregulated advice. This also includes the insurance-based savings plans such firms offer.

Finally, these are not regulated products if there is no branch in the Czech Republic or if they do not have EU passporting – which allows them to market into the EU. 

How can I check my financial advisor?  

The key for the investor is to check out the adviser and the firm before any money is involved. And get it in writing. Check with: 

  • Czech National Bank Register 
  • EFPA website  The Find an Advisor Function allows the public to find transparent and qualified advisors in the Czech Republic (though there will be qualified advisors that have not joined EFPA. Nevertheless, it is a useful tool.  
  • LinkedIn profiles 


  • How long they’ve in business 
  • Where they are regulated and for what activities 
  • History of the adviser 
  • Qualifications and professional memberships

Besides having the correct and legal licenses, financial advisors should be members of recognized professional institutions where they are signed up to a Code of Conduct and possess ongoing Continued Professional Development (i.e., keeping up to date). 

There are registers that the public can check.  

Aisa International 

The international investment world is complex. Your financial advisor must have the licenses, qualifications, expertise, and transparency that is absolutely essential for expats’ investment strategies. 

From the beginning, Aisa International has been a transparent, fee-based, no-commission advice firm. All advisers are  qualified to at least the UK minimum diploma level, with many achieving chartered status.  

Holding all current regulatory licenses, including the FCA license in the UK and the Investment License in the European Union as well as being a discretionary fund manager, Aisa Group is uniquely qualified to provide personal financial advice for U.K. pensioners living outside of the U.K. 

Additionally, the company holds Insurance Distribution Directive, supplementary pension, and credit licenses. Aisa Group is a fiduciary and holds a US Securities and Exchange (SEC) license. This allows it to safely and legally work with American expats who have financial interests in the US stock market. 

Direct investment advice is given only by holders of the relevant EU investment exams. All of Aisa International’s financial advisors must meet the requirements of the local country in which they operate. 

Headquartered in Prague, Czech Republic, Aisa International serves its global clients where they reside through its network of highly qualified advisors.  

Image By vecstock

Aisa International, s.r.o. is a wealth management firm with an award-winning team who provides investment advice, financial planning, and asset management for U.S., U.K., and E.U. expatriate citizens residing abroad. Aisa International holds all current regulatory licenses, including the FCA license in the UK and the Investment License in the European Union. Therefore, Aisa International is uniquely qualified to provide personal financial advice for U.K. pensioners living outside of the U.K. Aisa International serves its global clients where they reside through its OpesFidelio network of highly-qualified advisors. For more information, please visit www.asiainternational.cz. 

See also:

When Can I Take Advice From a Non-EU Financial Adviser Firm? 

The views expressed in this article are not to be construed as personal advice. Therefore, you should contact a qualified, and ideally, regulated adviser in order to obtain up-to-date personal advice with regard to your own personal circumstances. Consequently, if you do not, then you are acting under your own authority and deemed “execution only”. The author does not accept any liability for people acting without personalised advice, who base a decision on views expressed in this generic article. Importantly, where this article is dated then it is based on legislation as of the date. Legislation changes but articles are rarely updated, although sometimes a new article is written; so, please check for later articles or changes in legislation on official government websites, as this article should not be relied on in isolation.

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Post written by:

Chris Lean

In the UK he worked with accountants as an independent financial adviser, qualified as a Chartered Financial Planner and became an examiner for the Chartered Insurance Institute. He also qualified as a European Financial Planner and specializes in investment and pension advice to clients.

Aisa International is the only financial advice service company specialising in advice for expats that is regulated as a Securities Trader in the Czech Republic, USA, and UK.