In this case study, Partner from GSB Wealth, Mauro De Santis Bo discusses how he helped a client in Spain restructure their QROPS, reduce costly fees, and improve long-term pension growth—potentially saving hundreds of thousands over time
Client Background:
- An expat living in Spain came to us for a pension review after concerns that his Qualifying Recognised Overseas Pension Scheme (QROPS) wasn’t delivering the returns he expected.
- Set up in 2010, valued at approximately £1.18 million, the pension had grown to £2 million—but high fees and a complex structure meant he could have been far better off.
This case study builds on my previous piece, “What Expats Need to Know Before Relocating to Spain,” and highlights how a clearer, cost-effective strategy can make a big difference to your wealth.
What do expats need to know before relocating to Spain
Challenges identified
1. Overly complicated & expensive setup:
- The pension structure was complicated by multiple layers, including an offshore insurance bond and an unnecessary investment platform inside this bond.
- Total annual fees amounted to approximately 2.59% per year, significantly eating into returns.
- A high surrender penalty (£85,033) was applied due to the initial commission-based structure put in place by the previous adviser.
2. Analysis of existing arrangement:
- High charges: The client faced multiple overlapping fees from trustees, platform providers, and discretionary fund managers (DFM), which were not clearly disclosed initially.
- Investment inefficiency: His portfolio had too much stock overlap, heavily weighted in big names like Microsoft, Apple, and Nvidia, reducing diversification and inadvertently increasing risk.
- Lack of actionable advice: The client’s previous financial planner had flagged the issues but failed to implement recommended changes, leading to continued unnecessary costs.
The solution: A simpler, smarter way forward
Keeping the right structure: We advised maintaining the current QROPS trustee structure in Guernsey due to its beneficial tax and inheritance implications, given the client’s son resides in the Balearic Islands, which recently abolished inheritance taxes for parent-to-child transfers.
- Cutting costs, removing complexity: We removed the expensive bond and investment platform, eliminating unnecessary fees and structural complexity.
- Advised transferring the funds into a General Investment Account (GIA) denominated in GBP, optimised for cost efficiency and flexibility.
- A transparent, evidence-based investment approach: Suggested reinvesting into a simplified, highly diversified, and evidence-based portfolio, comprising 100% equities to align with the client’s long-term succession planning objectives.
Results achieved
- Immediate reduction in fees: Annual charges reduced from 2.59% to 1.34%, creating annual savings exceeding £25,000.
- Long-term growth potential: Projected fee savings alone could amount to over £500,000 over 20 years, significantly boosting the inheritance value for the client’s heir.
- A stronger long-term investment approach: By eliminating unnecessary duplication and high-cost active management fees, the client’s portfolio is now better positioned to capture market growth efficiently.
Potential returns with Evidence-Based Investment
If the client had adopted our evidence-based investment philosophy from the outset in 2010, their pension could have grown by over 300% by 2025
The graph below shows the potential returns of investing in a low-cost, globally diversified portfolio since 2011—demonstrating that the client’s pension could have grown to over £5m instead of £2m:
Performance of the iShares MSCI ACWI UCITS ETF (GBP) from October 2011 to March 2025, showing a total return of 330.61%. Data sourced from FE fundinfo 2025. Past performance is not necessarily a reliable indicator of future results
Why GSB Wealth does things differently
Traditional commission-based advisers in Europe often structure pensions through complex products like insurance bonds, leading to opaque fees and penalties benefitting the advisers more than the clients.
We take a transparent, fee-based approach:
- prioritising clients’ financial goals
- reducing complexity
- and enhancing returns
Conclusion
For expats residing in Spain with existing QROPS pensions, a thorough review by a transparent, fee-based financial planner can uncover significant cost savings and enhance investment efficiency.
Our evidence-based approach ensures your pension aligns with your long-term financial objectives, particularly regarding tax efficiency and estate planning.
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Disclaimer
GSB Capital Ltd is registered with the Dubai International Financial Centre (DIFC), licence no. CL4377, and is regulated by the Dubai Financial Services Authority (DFSA), reference no. F006321. This article is for informational purposes only and does not constitute financial advice. Investments can go up or down, and you may not get back the amount originally invested. Changes to pension structures may involve risks, including market fluctuations, currency exchange rate movements, and regulatory changes. Always seek professional financial advice tailored to your personal circumstances before making investment decisions.