Choosing the right financial adviser is important in any country. When you are living abroad — managing pensions in a different jurisdiction, navigating two or more tax systems, investing across borders — the stakes are higher and the risks of getting it wrong are greater.
The expat financial services market has attracted more than its fair share of poor practices: high-commission offshore products, unsuitable "guaranteed" return schemes, and advisers who are helpful right up until you need them. This guide explains what good advice looks like, how to check an adviser's credentials, and the questions to ask before you commit.
Understanding regulatory frameworks
Financial advice is regulated differently in every country. Understanding which regulatory body governs your adviser — and what protection that provides — is the essential starting point.
UK: Financial Conduct Authority (FCA)
FCA-authorised firms must meet demanding standards of professional competence, treat clients fairly, make suitable personal recommendations and provide adequate disclosure of all costs. FCA authorisation can be verified at register.fca.org.uk. If an FCA-authorised firm acts negligently or dishonestly, complaints go to the Financial Ombudsman Service and, if the firm fails, to the Financial Services Compensation Scheme (up to £85,000 per person for investment claims).
UK nationals living abroad can use FCA-regulated advisers, but the adviser must be careful about regulatory permissions in the client's country of residence.
Cyprus: CySEC (Cyprus Securities and Exchange Commission)
For clients dealing with Cyprus-based advisers, CySEC is the regulator. CySEC-authorised firms must comply with the EU's MiFID II framework, which sets strong minimum standards across the EU. Check the CySEC register at cysec.gov.cy. Cyprus is a significant hub for international wealth management, and many reputable firms are CySEC-regulated.
Cayman Islands: CIMA (Cayman Islands Monetary Authority)
CIMA regulates financial services in the Cayman Islands. Many hedge funds and offshore structures use Cayman-domiciled entities. CIMA regulation is relevant for fund structures but is generally less directly relevant for individual financial planning advice.
British Virgin Islands, Isle of Man: FSC
The BVI Financial Services Commission and Isle of Man FSA are the respective regulators. The Isle of Man FSA is well-regarded for its robust oversight of insurance-based products including offshore bonds.
The key question: Is the adviser regulated in the jurisdiction where you are resident? An adviser operating in Spain should be authorised under Spanish rules (CNMV or Banco de España). Operating without proper local authorisation is a regulatory breach — and a red flag.
Independent versus restricted advice
Under MiFID II (which applies across the EU and equivalent UK rules), advisers must clearly state whether they provide:
- Independent advice: The adviser can consider the full range of products and providers in the market and selects solely on merit. No financial incentive from any provider influences the recommendation.
- Restricted advice: The adviser is limited to a panel of providers or a specific range of products. Many bank-based advisers and some tied agents are restricted.
Independent advice does not guarantee quality — but it removes a structural conflict of interest. An adviser who earns more commission from recommending one product than another has an inherent incentive misalignment with the client.
Ask directly: "Are you independent or restricted? Do you receive any commission, trail payments or other remuneration from product providers for recommendations you make to me?"
Fee structures
The expat financial services industry has historically operated on a commission basis, where advisers earn fees paid by product providers rather than directly by clients. While MiFID II bans commission for independent advisers in the EU, some jurisdictions and some product types remain commission-based.
Fee-based or fee-only advice — the client pays a fee directly for the advice, independent of which products (if any) are recommended. This is the cleanest structure for alignment of interests.
Assets-under-management (AUM) fee — the adviser charges an annual percentage of the assets they manage (typically 0.5%–1.5% per year). This is common and reasonable, provided the fee is transparent and the value delivered justifies it.
Commission-based — the adviser earns money from the products they recommend. This is inherently conflicted and is less common in regulated EU/UK markets than it once was, but still prevalent in less regulated markets.
Get a full written breakdown of all charges — adviser fee, product charges, platform charges, fund charges — before committing. Ask for the total cost expressed both as a percentage and in cash terms.
MiFID II protections
If you are dealing with a MiFID II-regulated adviser (EU or UK), you benefit from several important protections:
- Suitability assessment: Before making any personal recommendation, the adviser must assess your investment objectives, risk tolerance, time horizon and financial situation. They must recommend only what is suitable.
- Cost and charges disclosure: You must receive a clear breakdown of all costs before the service begins and annually thereafter.
- Best execution: If dealing in financial instruments, the firm must take reasonable steps to achieve the best outcome for clients.
- Conflicts of interest: Firms must manage and disclose conflicts of interest. Independent advisers cannot accept inducements from providers.
- Client money: Your money must be held separately from the firm's own money with a regulated custodian.
Questions to ask before engaging an adviser
- Are you regulated and by whom? (Request the firm's regulatory number and verify it.)
- Are you independent or restricted? What providers/products does that cover?
- How are you remunerated? Fee, AUM percentage, commission — and how much?
- What qualifications do you hold? (CFP, CFA, Diploma in Financial Planning — and are they current?)
- Who will actually look after my account day to day?
- What is your process for reviewing my portfolio and plans each year?
- What happens to my investments if your firm is sold or closes?
- Have you ever been subject to regulatory censure or professional disciplinary action?
- Who holds my assets in custody, and how are they segregated?
- How do I make a complaint, and to whom do I escalate if I am not satisfied?
Red flags to avoid
Unsolicited approaches. Legitimate advisers do not cold-call about your pension or investments. Cold-calling about pension transfers was banned in the UK in 2019. Treat any unsolicited financial approach with caution.
Guaranteed returns. No legitimate investment adviser can guarantee investment returns. Any promise of fixed above-market returns should be treated as a warning sign.
Pressure to act quickly. Genuine opportunities do not evaporate in 24 hours. High-pressure sales tactics are designed to prevent you thinking clearly.
Complex structures without clear purpose. If you cannot understand why a product is constructed the way it is, or why multiple holding companies in multiple jurisdictions are involved, ask harder questions.
Very high initial charges or lock-in periods. Some offshore products impose front-end charges of 5–8% and surrender penalties for the first 5–10 years. These are not illegal but may not serve your interests — and often reflect a commission structure designed to reward the adviser, not you.
How Global Investments can help
We are an independent international wealth firm serving clients worldwide, with regulated services provided through our authorised partner entities. We work for you, not for product providers. Our advisory team holds relevant professional qualifications and can provide transparent, fee-based advice covering investments, pensions, tax and estate planning.
Contact us to arrange an initial consultation.
This article is general information. Regulatory requirements vary by country and change over time. Always verify an adviser's regulatory status and obtain full cost disclosures before engaging.
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.