As an expat in France, when you search for a financial adviser, how can you be assured that they are suitable for you? We asked Robert Kent of Kentingtons, professional tax and financial advisors in France, to share his expertise and explain how to choose the right financial adviser for expats in France.
Who is on Your Team?
If you think of project sizes, are there much more significant than uprooting your entire life from your home country and everything you know and moving to a foreign country, such as France?
Successful projects, especially those as significant as uprooting your life and moving to a foreign country like France, are usually the result of a team effort. So, who should be on your team? Who are the key players? Perhaps a relocation expert, a French accountant, a legal expert, or, most importantly, a financial adviser who can guide you through the complexities of managing your finances in France.
You will need counsel on the financial complexities of living in France, such as French income tax, capital gains tax, property wealth tax, tax planning, social charges, and many other issues, such as French succession law, inheritance tax, and joining the health system (which may have financial implications).
Speaking Your Language
Finding an adviser who speaks your language may be reassuring. However, it is hardly evidence of competence or qualification.
UK financial advisers cannot advise you on France, and a French adviser may not understand your financial assets or the laws and tax treaties that regulate them.
Choosing the wrong financial adviser can have catastrophic consequences. Many financial planning experts who speak English and are based in France don’t speak French. How can they understand how things work in France? How do they get their direct “expert” knowledge? They have no French qualifications or even basic language skills. If the person you need to rely on relies on another source (that might not be a professional one), it is likely better to remove them from your team.
Independent Financial Advice
In France, an independent adviser is a Conseiller en Gestion de Patrimoine Indépendant (CGPI), the “I” denotive of independence.
When getting financial advice in France, the UK’s idea of tied, restricted and independent is different, so forget advice in these terms. In France, there is only “independent” or not; there is nothing in between.
French Independent advisers must prove that they have considered the entire investment market, analysed every option, and continue to monitor it ongoing. This is quite an undertaking that non-independent advisers do not need to fulfil.
Notably, a French financial adviser’s independence status dictates how the adviser is paid. Under French law, an independent financial adviser may not accept any “inducements” from third parties, whereas a non-independent adviser may do so. The only source of revenue is the client, making what is best for you the only focus.
Non-Independent Advice
Insurance companies are not independent sources of financial advice because they have agents everywhere who only sell their products, regardless of whether they fit your needs.
You may consider a bank, but this is also not a good option for independent financial advice. Just like insurance companies, banks will only recommend using one of their financial products rather than finding the best one for you.
A non-independent adviser is limited in what they can recommend. In the case of the famous (and essential in good investment and tax planning in France) Assurance Vie investment structures, they may only offer one or two alternatives and a limited range of investment funds for you to invest in.
International Perspective
UK investment structures, such as ISAs, are not available in France. Similarly, there are French savings and bank products that are not available outside of France. Savings products like Livret “A”, up to certain limits, can be helpful in your liquid cash. However, you may wish not to tie yourself into products or accounts that might have a limited investment selection or that do not work in other countries outside of France. The flexibility of total independence is, therefore, vital.
So Much More Than Investment Advice
A French adviser must qualify and offer services covering much more than investment counsel and financial planning. They must understand French fiscal law, even civil law, where this may impact finances, demonstrating connaissance juridique or legal knowledge. They are also required to have a detailed understanding of tax law. This level of experience and qualification is beneficial when navigating a new system, so independent advice is crucial for new movers to France.
How to Investigate Your Adviser
It is essential to consider that any financial adviser doing their job correctly will not mind if you check them out; in fact, they should support it, directing you to official sources and offering to help in any way possible. It would be best to have absolute trust in who you are getting financial planning advice from, so thorough research is essential. Do not stop investigating until you are fully convinced, as your family’s financial security is on the line.
How do you properly check out the official status of a financial consultant in France? The good news is it is straightforward!
You can check if a financial adviser in France is registered at www.orias.fr. Helpfully, you can also choose English as the language. This website can help you verify any financial adviser you might talk to.
It is essential to understand that ORIAS is NOT a regulator; it is just a list of intermediaries for different financial roles. If someone is not on the list, they are not registered as professionals in France and are best avoided.
The following step is to check their status and see if it suits your requirements. The common name for an adviser is “Conseil en Gestion de Patrimoine“; a consultant for one’s (global) estate.
If you’re seeking French-regulated financial advice, the official designation to look for is “Conseil en Investissement Financier” (CIF). A CIF is regulated by the “Autorité des marchés financiers” (AMF) and is affiliated with one of four AMF-approved associations: La Compagnie CIF, CNCGP, CNCEF Patrimoine, or ANACOFI CIF.
To gain this French regulatory status, you must prove the following:
- To be a person of good repute
- Demonstrate professional competence through diploma, experience and professional training.
- Be insured, not for the benefit of the adviser, but for the benefit of the clients, against adviser error.
- Join an accredited professional association (who reports to the French regulator) to police day-to-day activities.
- Must be a fiscal resident of France or have a head office in France.
How reassuring it is to know that the person you are taking French-focused financial advice from is of good repute, competent at offering French advice, accountable in France, and covered in France for any error! It is also reassuring to think that the advice is not being given to you by someone on a remote island somewhere but actually in France.
Entrusting your family silver with a criminal (whether through ignorance or intent) is probably not the best of ideas!
Other licences exist that may not infer regulation, merely registration, such as “Courtier en Assurance” or COA (basically an insurance broker). A CIF will automatically have this licence, as life insurance-based investments, such as “assurance vie,” are often essential to financial planning in France.
Any regulatory or regulated status must be on all advertising, websites, newspapers and magazines, including all printed stationery.
What about the EU financial passporting rights?
An EU passport allows advisers or financial institutions to operate in another EU member state, providing services they’re regulated for in their home country. While offering investment products is legitimate, this passport doesn’t cover providing tax planning advice or general guidance about local systems, as these fall outside their regulatory scope and expertise.
This system is often exploited as a badge of regulation, which can be misleading. The UK’s FCA has never had jurisdiction over advice offered in other countries and lacks the expertise to intervene as a mediator.
Since Brexit, UK-based financial companies no longer have access to the EU passporting system. However, some have established entities within the EU to maintain access, even in regions where they’re not physically located. They often claim the EU passport is sufficient for regulation and client protection, but this is misleading since it offers no meaningful safeguards.
What Else Needs to be Considered?
- On what basis are they paid, and are their charges transparent?
- What level of experience do they have?
- Are they registered as independent in France?
- Explain the ongoing service they offer!
Summary
Navigating the complexities of international financial planning can be challenging, especially with a language barrier. However, an advisor speaking your native language doesn’t necessarily guarantee competence; some may exploit this to their advantage. Less-than-honest advisers often avoid regulation to sidestep oversight and accountability, typically establishing their legal entity outside the country where they offer financial or wealth management advice.
As an expat living in France, this article equips you with the knowledge needed to sidestep such pitfalls and secure high-quality, expert advice to make your transition to France a smooth and successful one.
Moving to France promises an exciting new chapter, but poor financial advice can quickly turn this adventure into a nightmare. Taking the time to do some research upfront is well worth the effort.
If you would like professional, qualified help and advice you can trust for reviewing your finances and investments, get in touch with Kentingtons at: kentingtons.com
