Expanding across Europe may not be the obvious route for UK financial advice firms to grow their reach.<\/p>\n
With around 1.3 million British expatriates living in EU countries, however, there is clearly a market for financial advice.<\/p>\n
Finn Houlihan, founder and managing director of Torquay-based AAF Financial, recently created AAF Financial Planning Europe to deal with British expats in European countries. He had been mulling it over for some time \u2013 so why do it now?<\/p>\n
The Brexit legacy<\/strong><\/p>\n Before Brexit, Houlihan worked as a chartered financial planner at The Fry Group, dealing with UK clients and British expats in the Middle East and Spain. This was the era of passporting, when it was easy for UK-regulated firms to provide services across Europe.<\/p>\n \u201cYou just followed the same advice process as you did for the UK and we had permissions for pretty much all EU member states to provide financial advice,\u201d says Houlihan.<\/p>\n From a regulatory point of view, clients have got to be clear about who they are engaging with \u2013 is it the UK or European business?<\/p>\n<\/blockquote>\n But that ended with Brexit, which removed UK firms\u2019 right to passporting. This created complications for advisers operating across Europe. For example, if a Spanish-compliant bond was needed, it became difficult for UK advice firms to source.<\/p>\n \u201cA lot of companies then said, \u2018Forget Europe \u2013 you can\u2019t do a proper job as an adviser because you need to be regulated in an EU member state,\u2019\u201d recalls Houlihan.<\/p>\n He founded his own UK advice business in 2023 and admits he was \u201csitting on the fence\u201d about getting back into the European advice market, which he missed.<\/p>\n Having spent the previous few years watching from the sidelines, Houlihan noticed there were not many players in the European advice market. Typically, firms focus on clients when they have become residents of a country. But Houlihan saw a need to help British expats with pre-planning, their move abroad and ongoing advice.<\/p>\n With the compliance responsibility on me, I want to be assured that the right calibre of adviser is representing us<\/p>\n<\/blockquote>\n \u201cThat\u2019s when I felt I wanted to get back into the European market,\u201d he says.<\/p>\n Changes to the UK tax system \u2013 including the move from domicile to a residency-based system, and the forthcoming inheritance tax changes to unused UK pension pots \u2013 are also likely to stimulate demand for advice from the expat community.<\/p>\n But how does a small UK advice firm go about meeting this need?<\/p>\n Clarity through separation<\/strong><\/p>\n Houlihan created Dublin-based AAF Financial Planning Europe separately from his UK business \u201cbecause that\u2019s the world we live in now\u201d. But the European firm is not directly authorised.<\/p>\n \u201cIn an ideal world, I\u2019d love to go directly authorised in Europe,\u201d he says. \u201cI probably could, through Ireland, but that would need a huge commitment in terms of investment.<\/p>\n I shied away from marketing the UK brand internationally, as I think that would have caused confusion<\/p>\n<\/blockquote>\n \u201c[The regulator in Ireland has] done that intentionally as they want business of substance. They want clients to be able to speak to an adviser if they knock on the office door.\u201d<\/p>\n\n
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