If you were going to have heart surgery, I am sure that, before going under the knife, you would like to be certain that the person performing the operation was in fact a qualified and hopefully experienced heart surgeon. You might be very worried indeed to find that their background was as a tree surgeon and they were merely trying their hand at something different … well its still surgery!
The fact is that those coming from the UK usually understand something of financial regulation, at least most have heard of the Financial Services Authority (FSA). Now you are dealing with a new country and will most likely need help with financial planning in France. You will probably be looking for advice on all aspects of financial planning in France, for example, French income tax, capital gains tax and wealth tax, as well as so many other issues, such as French succession law and inheritance tax.
You want to be sure the person you choose to consult knows what they are talking about and that if they get it wrong, you are protected and that they will be penalised for their actions. So how do you know who can help?
It is a fact that the financial regulatory system in France is embryonic when compared to the UK, but it is coming on in leaps and bounds and is catching up fast. The generic term for a person or company offering financial advice is a Conseil en Gestion de Patrimoine, which is basically someone who offers advice on ones worldly assets. However, this is merely a job description and is not a legal status.
Unknown to many, regulation, similar to that of the FSA exists in France. Many advisers claim they are “regulated and qualified in France”, but then show nothing at all to back it up. Some claim they have a “Passport” from the FSA in the UK and this makes them legal to offer advice on the French system.
There are those who indicate that they are “regulated” by ORIAS. This is indeed a legal requirement, but is not regulation and does not permit the company or individual in question to offer complete financial planning. I will cover these false claims of regulation later on, but first to the point … what is the right way?
The good news is it is so very easy to spot the pretenders, since all advertising, including websites, such as this one MUST give evidence of their legal status. So, whenever you pick up a publication or see any website, the legal mentions should be somewhere. If the legal status of the company is not clearly shown, (though small print is common and perfectly acceptable) even if they are regulated, the company in question is not abiding by French rules, offering you some indication as to their standards.
The financial regulator in France is the Autorité des Marchés Financiers (AMF), which translated means Authority of the Financial Markets. The AMF is not identical to the FSA, as there are distinct differences. The FSA deals with all financial regulation, but the AMF covers limited branches of finance.
If you follow the above link, it takes you to the site, in English, and tells you what they do. An adviser in France is translated on the AMF site as an FIA or Financial Investment Adviser. The French Translation here is Conseil en Investissement Financier or CIF, which of course, is what you will see noted in all the media of those companies complying with the law.
CIF status was introduced in 2004 as a result of the financial security act of August 2003 and was originally designed to cover banks and focused only on very specific investment product advice. CIF has evolved to cover any company or individual offering general financial advice. As such, CIF is now recognised as the closest equivalent to an Independent Financial Adviser in the UK.
To be a CIF one must establish one’s abilities and competencies, by experience, demonstration of training and in most cases (not all) examination. This experience and training proves that a CIF should know what they are talking about. This level is acceptable as evidence of what is known as Connaissance Juridique Appropriée (appropriate legal knowledge), allowing a CIF to give relevant legal advice. This is beneficial where the adviser may need to discuss French marriage regimes, for example, as part of overall financial planning.
Also, very importantly, the CIF must have professional insurance for the activity in question. This is not to protect the adviser, but it is to protect YOU THE CLIENT. If you are misadvised you can make a claim against the insurance. This is a good way of covering the client, since, even if the adviser goes out of business, the client can still claim from the insurance, even several years after the event.
The AMF dictates that CIFs must affiliate with one of the six professional organisations authorised by the AMF.
The professional organisations authorised by the AMF are:
Association Française des Conseillers en Investissements Financiers. Conseils en Gestion de Patrimoine Certifiés (CIF CGPC)
Association Nationale des Conseils Financiers CIF (ANACOFI-CIF)
Chambre des Indépendants du Patrimoine (CIP)
Association des Analystes Conseillers en Investissements Financiers (AACIF)
Compagnie des Conseillers en Investissements Financiers (CCIF)
Chambre Nationale des Conseillers en Investissements Financiers (CNCIF)
CIF, the name of the professional organisation and the advisers unique reference number must be printed on ALL paperwork and advertising.
All six of these associations must meet the rules put in place by the AMF. The very best will meet the standards of the international Financial Planning Standards Board, which go way beyond AMF rules, demanding the very highest standards and work to (International Standards) ISO 22222. The only organisation currently operating to this standard is the CIF-CGPC.
OK now I want to find out for sure if a company is regulated, what do I do?
This is also really very easy; you just go to the AMF website on this page. The page lists the six associations and there is a box “Nom de CIF”, in which to type the name of the company you which to check up on. Once you have typed in the name of the company and pressed return you will get details of the company concerned. If nothing is shown it is usually because the company does not have CIF status.
Make no mistake CIF is the ONLY legal status for offering complete financial advice in France, there is no other! Use an unregulated adviser and you are offered no protection and you are endangering your financial livelihood.
False claims of regulation
As we discussed at the beginning, there are various versions of what regulation for financial advice in France means. Let’s cover them:
There is no regulation!
I feel that we have already dealt with this claim as we have just seen evidence of regulation, in the form of the AMF website.
We have a “Passport”
I will start by saying there is nothing wrong with the European passport system. It is legal and it works well and many legal and compliant companies have a passport or even several. It is how they are represented (or misrepresented) by the adviser that is the problem.
Ask yourself whether you believe that if you received bad advice from an adviser in France, on the French tax and legal system, if the UK Financial Services would get involved and mediate in the proceedings on a subject they clearly would know absolutely nothing about! Common sense would dictate that this is not possible.
The fact is a passport allows an adviser to enter another European state and offer advice on that for which they are regulated for in their host country. Thus a regulated adviser in the UK can visit a client in France and discuss the UK and UK regulated investments. This means nothing to do with the French tax or legal system, which is hardly helpful if you are living in or are moving to France and clearly affords you little in the way of protection. The passport is, however, very useful for a French based adviser who wishes to visit the UK to offer advice on a future move to France.
We are “regulated” with ORIAS!
This is the one that fools many as it is indeed a requirement in France and appears very official. Being ORIAS registered is a good thing, indeed a CIF must be registered with ORIAS before being granted CIF status, as assurance vie, or life assurance based investments, are a very effective financial planning tool in France.
ORIAS stands for l’Organisme pour le registre des intermédiaires en assurance or roughly translated the organisation for the registration for insurance Intermediaries; it is NOT a form of regulation.
The status this brings is courtier d’assurance or insurance broker. Clearly an insurance broker is not a financial adviser. This status just does what it says, it allows the company to broker an insurance policy. If you just want someone to sell you insurance this is fine and is the only required status. However, if you want a life assurance investment bond, for example, and then would like detailed advice as to what should be inside this bond, you still need to talk to a CIF, thus the mandate of a ORIAS registered company or individual is very limited indeed, where financial planning is concerned.
As for a CIF, this status must be mentioned on all paperwork and professional insurance is also required to protect the client from bad advice. So ORIAS is a worthy status, but offers you little by itself, if financial planning for France is what you need. If you want to know if a company if registered this way see the ORIAS website.
Unfortunately this website is not available in English, but is easy to navigate. Type in the company name in Nom ou raison sociale and press return and the details will come up if they are registered.
We are regulated in France! (but with no evidence)
You are now very well armed and informed with a better understanding of how the system works and cannot be so easily fooled. You know what the status for offering advice should look like and you know what to look for on their adverts, websites and paperwork. You know the websites to consult to confirm their status and can now feel very confident about taking advice in France.
The point is that a dishonest or incompetent adviser will not seek to be assessed and regulated. They will do all they can to avoid scrutiny of any kind, thus lack of any regulation should set your alarm bells ringing. If you are coming to France for a better life, make sure you get off to the best possible start and take quality, regulated advice.
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