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STM Group was established in 1989 and listed on the Alternative Investment Market of the London Stock Exchange in 2007, making it the only PLC in the QROPS space.
STM Group is international with a spread of offices strategically located around Europe, in London, Jersey, Gibraltar, Jersey, Malta, and Spain. The Group employs approximately 150 people.
STM Group’s stated aim is to deliver clear, innovative, impartial financial and commercial solutions to cross-border investors, entrepreneurs and expatriates - which help clients protect and grow their investments.
These solutions include international retirement, life assurance, company management, residency and citizenship programmes, international tax, trust & trustee services.
STM has in excess of 14,500 pensions under administration from their offices in the UK, Gibraltar, and Malta.
STM offers QROPS and QNUPS pension solutions in Malta and Gibraltar, and has schemes specifically structured for US and Australian business.
They also have their own in-house life assurance company (STM Life).
STM offers some of the most competitively priced QROPS on the market. Their QROPS are fully inclusive, with no hidden fees, and currently there are NO ESTABLISHMENT fees (previously £900).
The annual trustee fee is £750 on a fully transparent all-inclusive basis.
However, holders of an STM product need to be particularly aware that many layers of extra cost are often hidden inside the investment solution recommended by the underlying financial salesperson who recommends STM in the first place.
This is often indicated by the presence of an offshore insurance bond, structured products or unregulated collective investment schemes inside the pension trust. If held, the impact of these high commission paying products will be to reduce client returns.
STM offers a high level of technical support and, in addition to a comprehensive QROPS offering, they also have a UK SIPP solution.
They are expanding internationally with an office now open in Australia, which complements their new Gibraltar QROPS scheme which is included on the HMRC ROPS list, and has been recognised by the Australian Tax Office as a foreign superannuation scheme.
STM’s trust-based pension schemes are legally established by a Master Trust Deed which, together with its accompanying Rules, govern how the whole pension scheme works.
STM is the professional and regulated Trustee company appointed to ensure compliance with the Trust Deed and Rules.
An individual becomes a Member of the pension scheme by “adhering” to the Trust, thereby accepting the terms of the rules and the protections arising therefrom.
STM’s contract-based pension schemes are legally established by way of a Unilateral Declaration, also with accompanying Rules, which govern how the whole pension scheme works.
STM is the professional and regulated Scheme Administrator which ensures compliance with the Declaration and Rules.
An individual becomes a Member of the pension scheme by “contracting” with the Administrator to gain the retirement benefits and protections of the scheme.
STM’s pension schemes, whether trust or contract-based, have very similar application documents and processes, especially for “ROPS”.
There are no practical differences in the contributions/ transfers which can be received, the investments which can be made or the retirement benefits which can be paid.
STM’s charging structure is also identical across trust or contract ROPS.
Some countries, including some civil law countries, may not recognise the concept of a trust or there may be uncertainty on how trust-based pensions are treated for tax or reporting purposes.
In such countries, a contract-based pension may be preferred.
Some countries have very strict laws to ensure that Trustees have a “fiduciary duty” to act in the best interests of the scheme members, but they do not have such laws for contract pension providers.
Such differences, for example in the UK, tend to concern employer pension schemes more and in any event are usually mitigated by regulation and the pension itself.
STM applies the same level of management and control to ALL of their pension schemes, whether trust or contract-based, and ALL within the same regulatory framework.
All pension assets are entirely and legally separated from STM’s assets. These protections are subject to external audit.
Accordingly, there is no difference between that level of security and oversight that applies.
Our verdict is that STM is technically strong and offers competitive products with transparent low annual fees.
Their product range was further strengthened by their acquisition of the UK SIPP provider London and Colonial Holdings Limited in the autumn of 2016.
Their technical know-how means they are able to offer a wide range of solutions - but there remains a danger that the subsequent financial and investment advice associated with an STM QROPS transfer may lead to unsatisfactory outcomes, because of its widespread use and popularity with commission-based financially incentivised salespeople.
Read the UK regulator's advice on pension transfers. NEVER deal with a firm that isn’t authorised as a UK pension transfer specialist.
Our advice would be to seek urgent professional fee-based independent financial advice if you have an existing STM QROP.
We offer a portfolio X-Ray Review™ to give you the information you need to make the best decision on your pension or QROP.