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Brexit – Possible Implications

Remember that, given the progress of UK/EU negotiations, the scenario highlighted below could change. We will write to any customers who are directly impacted by any changes when more information becomes available.

FOR UK RESIDENTS

UK FINANCIAL SERVICES COMPENSATION SCHEME (‘FSCS’)

Policyholders who were habitually resident in the UK, at the time of applying for a policy – and where the policy commenced on or after the 1 December 2001 are likely to be covered by the UK Financial Services Compensation Scheme (FSCS), which is an independent industry-funded compensation scheme of last resort.

The purpose of the FSCS is to provide customers of UK authorised financial services firms, with a safety net, in the unlikely event that the product provider should be unable to meet its financial obligations.

In the case of a no deal Brexit, it is our understanding that existing clients will lose the ability to claim under the FSCS after Brexit day. There is no equivalent scheme in Ireland or the EU which could replace it.

UK RESIDENT CUSTOMERS WITH ADVISERS BASED IN AN EU COUNTRY THAT ISN’T THE UK

One of the changes being discussed as part of Brexit negotiations is that EU-based financial and fund advisers will no longer be able to recommend and distribute products and financial and fund advice services to UK customers after Brexit.

If you are a financial and/or fund adviser based in an EU country that isn’t the UK with UK resident clients, there may be implications on your ability to continue to advise those clients in the event of a no-deal Brexit.

POSSIBLE IMPLICATIONS FOR EU RESIDENTS OUTSIDE UK

EU RESIDENT CUSTOMERS WITH ADVISERS BASED IN THE UK

One of the changes being discussed as part of Brexit negotiations is that UK-based financial and fund advisers may no longer be able to recommend and distribute products and financial and fund advice services to EU resident customers after Brexit, or any transitional period agreed.

If you are a financial and/or fund adviser based in the UK and your clients live in an EU country that isn’t the UK, there may be implications on your ability to continue to advise those clients in the event of a no-deal Brexit.

CUSTOMERS INVESTED IN THE SPANISH COLLECTIVE INVESTMENT BOND

Remember that, given the progress of UK/EU negotiations, the scenario highlighted below could change. We will write to any customers who are directly impacted by any changes when more information becomes available.

There is a possibility that some funds that we offer will lose their UCITS (Undertakings for Collective Investment in Transferable Securities) status following Brexit. This situation could directly impact your clients invested in the Spanish Collective Investment Bond as the tax advantages of the product are predicated on being invested in those UCITS funds.

If this is the case, most insurance companies will arrange for alternative funds to be offered which, will continue to benefit from the tax advantages prior to Brexit.

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