Advisers welcome Kiwi QROPS code of conduct

Advisers and qualifying recognised overseas pension scheme (QROPS) providers have welcomed a move in New Zealand to create a code of conduct for the products.

New Zealand providers and advisers, led by best practice and compliance consultancy Strategi, are working together to create a voluntary code they claim will eradicate poor value and illegal products.

QROPS have been in the regulatory firing line for the past few years, with the closure of large schemes such as the Beazley scheme in 2010.

In March this year HMRC set up a specialist team to crack down on QROPS abuses, and in April the Treasury closed a legal loophole that allowed tax evasion via Hong Kong QROPS.

David Howell, group chief executive at Guardian Wealth Management commented: "The move by the QROPS providers in New Zealand to instigate a code of conduct is welcomed as a way to bring greater stability to the QROPS market in the jurisdiction."

Geraint Davies, director of advisory firm Montfort International, said the campaign for a code of conduct is "just advisers and providers saber-waving" at this stage, but added it will help the New Zealand regulator control the industry.

"The regulators are most definitely watching with interest," Davies said.

"Due to the complexity of the subject the regulators will never get on top of it, so if good triumphs over bad their job will be made a whole lot easier.

"We think a code of conduct will put advisers and providers in a position where they cannot but endorse it."