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Beware: International Financial Advisers operating in Italy!

By Spectrum IFA
This article is published on: 5th June 2013

It has been brought to my attention recently that there has been a sudden increase in the number of financial advisers looking to provide advice to expats in Italy, and a number of you have been telling me that you have been solicited with unwanted phone calls.

So here are some words of caution!

International advice firms that advise expats in various countries around the world are not new. We have been around for a long time. In The Spectrum IFA groups case, 10 years. Even longer if you take into account the experience of some of the advisers in the group. However, there has been one important development in this field in the last 5 – 10 years, in Europe and that is regulation. The EU have regulated this area of financial advice a lot more.

The outcome of this is whereas International financial advisory groups might have once offered a raft of offshore products to everyone, no matter where they live, each and every product must now be tailored to meet the individual requirements of the country in which the client is living, in this case Italy. An offshore product is often NOT suitable as they are blacklisted for Italian tax purposes (although they can be suitable in some cases) and detrimental tax treatment will apply. (I will write more about this on another blog post).

Thank fully most groups now offer the right products for the respective country in which the client lives but there are still some risks in working with groups and more importantly individuals who do not have the correct tax status in Italy.

Firstly, you need to ensure that the group with whom you are working is correctly regulated in Italy. They should be registered either with ISVAP or the CONSOB, and/or have ‘passports’ from another European country to do business in Italy. Thankfully most do and so this is the least concerning area.

My biggest concern is that of the advisers themselves. Quite often advisers will live and work in Italy but without actually becoming resident here and without submitting tax declarations. This is worrying. Should you do business with these people and they are subsequently investigated by the Guardia di Finanza then I can see no other option than them leaving the country and leaving you high and dry.

At the Spectrum IFA Group it is important for us to understand exactly what our clients are going through and so we are all required to be resident in the countries in which we work, which means tax declarations.

As more and more groups decide to come to Italy and work with expats, expat financial advisers will come under more and more scrutiny to ensure that we have our own personal tax affairs in order. If not then it is problematic for the adviser but even more so for the client who is left wondering why their adviser cannot return to Italy.

I am all for good healthy competition that drives standards up and creates innovation in the market, but bad practice does not bode well for the reputation of a financial profession which has had its fair share of scandal in recent times.

My advice is always to ask the question to whom you are working with: Are you resident and paying tax in Italy?, ask to see their carta d’identita, and ask for evidence of F24 if required (to evidence that they pay their taxes). Don’t forget evidence of registration in Italy and do enough research in advance.

The Spectrum IFA group has a branch in Italy and is fully registered with ISVAP and the Camera di Commercio. (P.Iva 12418981002)

Article by Spectrum IFA

The Spectrum IFA Group is committed to providing a professional financial advice to the expat community in Europe. The Spectrum IFA Group operates in a number of jurisdictions with 12 offices in France, Spain, Italy, Switzerland, Luxembourg, Malta and Portugal with over 50 advisers.

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