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[...] the word among policymakers now is increasingly around achieving a “clean” Brexit.
But the implication of this is still a withdrawal from, or limited access to, the single market. For asset managers this means their ability to market products and services across the EU bloc will be impaired due to a loss of passporting rights.
When we speak to management teams across the sector, it is clear that the issue of passporting remains front of mind. However, it is by no means the sole concern.
Of all the financial services sectors, wealth and asset management has been the most vocal since the Brexit vote: 71 per cent of the big fund houses have made public pronouncements, from lobbying for key issues, to raising questions about potentially relocating operations, staff or domicile. [...]
For asset managers, the question of passporting has been paramount since the referendum, but more than three months on, the narrative is beginning to shift. Of the companies that have spoken out on the impact of Brexit, nearly a quarter have highlighted free movement of people as a significant issue. [...]
Despite its importance to industry, official guidance on free movement has been unclear so far, although the government’s stance on immigration control appears to be hardening. [...]
Passporting and free movement of people are just two, albeit important, concerns that will dictate what the asset management industry will look like after Brexit. Whether we have access to the single market or not, in our negotiations with Brussels we need to consider what the UK stands to lose if we fail to preserve the prestige and global position of our fund management industry. [...]
Negotiators will need to carefully assess the different, and sometimes fluid, priorities across subsectors within financial services, and within the wealth and asset management sector itself. This is not going to be easy, but now that party conference season is behind us and negotiating lines are being prepared in earnest, policymakers must engage with an industry that has been more forthcoming than some of its financial services cousins.
We should remember that innovation is one of the great enduring strengths of the UK’s financial services. The signs are certainly there that this industry can, and will, evolve and add value to its clients under any circumstance. I have no doubt that, with the full backing of government, asset managers can grow even stronger in a post-Brexit world.
Full article on Financial Times (subscription required)