STM scopes out Australian QROPS offering as business booms
International pensions administrator STM Group is looking to offer QROPS tailored for UK expats in Australia after HMRC scrapped thousands of schemes from its approved list in July.
During an interview with International Adviser, STM – which has trading offices in both Malta and Gibraltar – cited plans to expand its range of qualified recognised overseas pension schemes (QROPS) to tap into other expat markets.
The company’s chief executive Colin Porter said the recent cull of 1,600 Australian QROPS from HMRC’s list is an opportunity for STM, and pointed to the firm’s plan to establish a HMRC-compliant product for expats in Australia.
Porter said the company is also looking to offer contract-based QROPS, which differ from the typical trust-based pension schemes, in addition to administering compliant transfers from other EU countries.
Gibraltar vs Malta
Meanwhile, STM’s half-year results which were published on Tuesday, revealed that the firm’s pensions business grew by 16% to £4.48m (€6.1m, $6.9m) in the first six months of the year, constituting 54% of the company’s overall revenue.
The figures show that new business revenue for STM’s Malta-domiciled QROPS rose to £600,000 from £540,000 in June 2014.
However, new business for its Gibraltar-domiciled QROPS fell to £260,000 from £460,000 over the same period. STM said this was because most of the new business growth was coming from the Middle East, which has double taxation agreements with Malta.
“Both Gibraltar and Malta are strategic sites because the jurisdictions have different double tax treaties with territories around the world,” said Porter.
“So if you’re an international financial adviser and you have a client in whatever those territories may be, STM will have a product that will fit that person because we have the options through the different double tax treaties.”
New regions
Over June and July the firm placed regional sales representatives in Asia, the Middle East and South Africa.
The STM data reveals that the number of new intermediaries signed on in the first six months of 2015 totalled 37, which STM’s chief financial officer Therese Neish said is more intermediaries than it signed on in the whole of the previous year.
“There is quite a long lead time between signing on the intermediary and actually starting to see new business coming in,” she said. “So we’re hoping that will start to generate additional business for us in 2016.”
On the 31 July, STM received the largest number of new applications for QROPS from the Middle East, standing at 549. This compares with 145 new applications in Asia and 108 in South Africa.
The company received 400 new applications from Europe and 203 from North America.
Turnover of £8.3m
STM reported an overall company turnover of £8.3m for the six months ending 30 June this year, a 12% rise against the £7.4m reported in the same period last year.
Its life sector also saw an increase in revenue to £750,000 at the end of June, against £480,000 during the same period in 2014.
STM’s trusts and companies sector has declined by 5.5% to £2.5m in the first half of 2015 from £2.7m in 2014, a fall which was driven by the firm’s decision to focus more on pensions and life assurance bonds.
The revenue which the trusts and companies sector brought to STM has therefore proportionality decreased, becoming increasingly diluted by the rise in the company’s pensions business.
STM currently administers pensions for clients resident in 106 countries.
When the firm was set up in 2007 it was focused solely on serving high net worth individuals, but has now moved to focus on internationally mobile clients.
