Choosing the wrong financial adviser is one of the most expensive mistakes an expat can make. Unlike a bad stock pick — which you can exit — the consequences of poor advice on pensions, tax structuring and insurance can compound for decades. Here are the five mistakes we see most often.
1. Using a domestic UK adviser who does not understand offshore
This is far and away the most common problem. Many expats continue to use the same adviser they had in the UK, partly out of habit, partly because they trust the relationship. The difficulty is that UK-based advisers are trained, regulated and experienced in the UK domestic market. The cross-border issues that define expat finance — tax residency, QROPS transfers, offshore portfolio bonds, social security treaty exemptions, local country tax obligations — are often genuinely outside their competence.
The consequences range from minor (bad product selection) to serious (triggering unexpected tax liabilities through uninformed transfers) to catastrophic (creating tax events in both the UK and the country of residence simultaneously).
A UK adviser who says "I can handle this" when asked about cross-border tax is not lying — they genuinely believe they can. But belief and competence are different things.
What to do: Ask specifically what proportion of the adviser's client base are internationally mobile. Ask about their qualifications in cross-border tax. If the answer is evasive, move on.
2. Paying hidden commissions disguised as product charges
Commission-based advice is still the dominant model across much of the offshore and expatriate financial services market. Advisers are paid — often handsomely — by insurance companies, fund managers and investment platforms to place clients in their products. Those payments do not appear as a visible fee. They are embedded in product charges, surrender penalties and annual management costs.
A commission-based adviser recommending an offshore investment bond may earn 6–8% of the amount invested in upfront commission — plus 0.5–1% per year thereafter. The client sees none of this disclosed directly. The product comparison the adviser shows you does not include what they earn from each option.
This creates a structural conflict that is difficult to overcome even when advisers genuinely try to act in the client's interest.
What to do: Ask every adviser, directly: "How are you paid? Do you receive commission from product providers? If so, how much?" A genuinely independent, fee-based adviser will answer clearly. A commission-based adviser may become evasive or reframe the question.
3. Misunderstanding QROPS transfer rules and tax charges
QROPS (Qualifying Recognised Overseas Pension Schemes) can be an excellent structure for UK expats looking to consolidate pension rights outside the UK. They can also be an expensive disaster if used incorrectly.
The Overseas Transfer Charge (OTC) — introduced in 2017 — imposes a 25% tax charge on transfers to QROPS schemes where either the member or the scheme is not in the same country, subject to limited exceptions. From 30 October 2024, the EEA and Gibraltar exemptions from the OTC were abolished; the principal remaining exemption is where both the member and the scheme are in the same country. The rules are strict and the exceptions are narrow. Advisers who do not understand the OTC rules have cost clients tens of thousands of pounds in avoidable charges.
Beyond the OTC, there are questions of whether a QROPS transfer is genuinely appropriate — given that an international SIPP may achieve similar results with fewer compliance obligations and lower ongoing charges — and whether the receiving scheme genuinely qualifies as a QROPS under current HMRC rules.
What to do: Any adviser recommending a QROPS transfer should be able to explain in detail why a QROPS is preferable to an international SIPP, why the specific scheme is appropriate, and why the transfer will not trigger the OTC. If these questions produce uncertainty, get a second opinion.
4. Ignoring currency risk on international portfolios
Many expats hold investments denominated in sterling while living in a country where their costs are in euros, dirhams, dollars or baht. This seems obvious — but the number of internationally mobile individuals who have never had a serious conversation with an adviser about currency exposure is striking.
A portfolio that grew 8% in sterling terms may have returned only 3% in the currency in which you actually live and spend, depending on exchange rate movements. For retirees drawing income from a sterling portfolio while living in Europe, a sustained sterling depreciation is not an abstract risk — it directly reduces purchasing power.
What to do: Review the currency denomination of your investments against the currency you actually spend. Consider whether some portion of your portfolio should be held in your country of residence's currency or a genuinely global allocation. Discuss this explicitly with your adviser.
5. Letting UK insurance policies lapse without international replacement
When people emigrate, they often cancel or allow to lapse their UK life assurance, critical illness and income protection policies — either because premiums seem expensive, because they assume they are no longer relevant, or simply because they stop paying. The problem is that replacing those policies in later life, or after a health event, may be prohibitively expensive or simply unavailable.
Equally, some policies that were relevant in the UK become less appropriate abroad — but advisers who are not thinking internationally may not flag the issue at all.
What to do: Before any lapse, get a proper international protection review. Offshore international life assurance is available from multiple providers and can be structured to follow you across jurisdictions, denominated in any major currency, and often written in trust for estate planning purposes. The time to arrange it is while you are healthy, not after a diagnosis.
The common thread
All five of these problems share a root cause: using an adviser who is not set up for international clients. The international expat market has unfortunately attracted a proportion of advisers who sell aggressively and advise poorly. The antidote is to choose an adviser who is genuinely independent, genuinely international, and transparent about how they are paid.
How to vet an international financial adviser properly
The consequences of getting this wrong are significant enough that it is worth spending real time on due diligence before engaging. Practical steps:
Check regulatory status. In most jurisdictions, financial advisers must be regulated by the local authority. In the UK, that is the Financial Conduct Authority (FCA). In Cyprus, the Cyprus Securities and Exchange Commission (CySEC). In Dubai, the DFSA. Verify that the adviser is actually registered with the relevant regulator — not just claiming to be. Regulator websites publish searchable registers.
Understand the fee structure in writing. Before engaging, ask for a written fee agreement that specifies: total fees (as a percentage or fixed amount), any commissions or referral fees the adviser receives from third parties, any charges that apply to exit the relationship, and any ongoing servicing charges. Refuse to proceed without this in writing.
Ask for client references. An adviser who is reluctant to provide references from existing clients serving a similar profile to yours is a red flag. Ask specifically for clients who are internationally mobile, not simply affluent domestic clients.
Test their cross-border knowledge. Ask specific questions about your situation — your country of residence, your pension structure, how they would approach the interaction between two specific countries' tax rules. Vague answers, confident generalisations without substance, or a sales pitch rather than a technical conversation are warning signs.
Check for conflicts of interest. Does the adviser have distribution agreements with specific investment platforms or insurance companies? Are they on the approved panel of any institution? These are not necessarily disqualifying — but they should be disclosed and the implications understood.
Red flags to watch for in the expat adviser market
The expatriate financial services market has a disproportionate number of poorly qualified advisers because: regulation is more fragmented across jurisdictions, many clients are far from home and less familiar with local oversight, and commission structures can be very generous. Specific red flags:
- Unsolicited approaches via LinkedIn, WhatsApp groups, or social events in expat communities
- Promises of guaranteed returns or "above market" income
- Pressure to make a decision quickly or sign anything before reviewing at home
- Offshore pension transfers recommended without any discussion of the tax implications
- Reluctance to provide a written breakdown of all fees and charges
- Advisers who are not regulated by any recognised authority in any jurisdiction
None of this means that finding a good international adviser is impossible — it clearly is not. But the due diligence process matters more in this market than it does when choosing a domestic UK adviser under FCA supervision.
Frequently asked questions
Should I use a UK-based or locally based adviser when living abroad?
Ideally, neither exclusively. The best arrangement for most expats is an adviser with genuine international expertise who understands both the UK system (from which most UK expats' financial history derives) and the rules of the country where they currently live. Many of the best international advisers are based in expat hubs — Cyprus, Dubai, Singapore, Hong Kong — rather than in the UK itself.
My adviser earns commission. Does that automatically mean I am being poorly advised?
Not automatically — but it creates a structural incentive that should be understood and managed. Commission-based advisers can still provide appropriate advice, but you cannot verify the recommendations are unbiased without knowing what the adviser earns from each option. At a minimum, require disclosure of all remuneration in writing before proceeding.
What should I do if I think my adviser has given me bad advice?
First, document everything — gather all correspondence, product documents, and adviser recommendations. If you are an FCA-regulated client, you can complain to the adviser directly, then escalate to the Financial Ombudsman Service if unresolved. For advisers regulated elsewhere, the equivalent local complaints process applies. For serious cases involving potential mis-selling, specialist financial dispute solicitors can advise on options including legal action.
Is there a minimum portfolio size where independent financial advice becomes worth it?
Professional advice is most cost-effective proportionally for larger portfolios — but the cross-border complexity of expat finance means it is worth engaging even for relatively modest portfolios. A single QROPS error or an insurance policy invalidated by a missed residency clause can cost multiples of the annual advisory fee. For portfolios above £100,000, the case for professional advice is very strong; below that level, at minimum get a one-off review from a specialist.
This article is for general information and educational purposes. It does not constitute personal financial advice. Past performance is not a guide to future results. The value of investments can fall as well as rise. Contact Global Investments to arrange an independent review of your financial arrangements.
This article is for general information only and does not constitute financial, legal or tax advice. Rules, prices and regulations change; verify current requirements with a qualified adviser before acting.