Under the EU Directive IP/02/1390 effective from 15th January 2005, the financial services of one country are now available to the citizens of another country. Accordingly, whilst a regulated adviser can provide his home country regulated advice and products to foreigners in his home country, the financial adviser can now also export his home country's regulated services and products to another EU country and their citizens – to the extent that these are permitted and suitable in that other country.

This exporting is effected by 'passporting' home country financial regulatory rights into another country, since it is now the country in which the consultant’s practice is situated that dictates the country of regulation, and not the place from which advice is provided.

As a result, however, 'Passporting' does NOT allow the regulated adviser of one country to provide regulated financial advice or services concerning another country ... the adviser then needing to be directly regulated in that other country by that other country's Regulator, and having that other country's appropriate professional indemnity insurance and financial guarantees.

Initially the aim was to enable a financial consultant of one country to continue advising their expatriate client who had moved to another EU country. The EU market expansion rules then expanded this further to now regulate and enable a resident of one country to seek advice from another EU country - but it is NOT designed to regulate an adviser of one country to advise a resident already in - or moving to - another country on that other country’s financial laws or products.

To confirm this, consider that all practitioners have to be regulated in order to be professionally insured. If regulated in the UK on UK law, UK tax and UK investment and other contracts, the professional indemnity insurance will only cover claims falling under these UK areas - and not claims for advice relating to another country. Likewise, if regulated in France on French law, French tax and French investment and other contracts, the professional indemnity insurance will only cover claims falling under these French areas - and not claims for advice relating to another country. Indeed, the UK FSA Ombudsman web site itself confirms that only claims falling under its remit can be considered, resulting in that only claims which fall under UK Financial Services Authority area of cover can be considered … thus excluding claims concerning advice of all non-UK matters. This situation applies to other countries: accordingly, for your protection, you should only seek financial advice concerning a country from those professionals who are regulated in that same country.