Brexit Threat for UK Fund Managers

The Brexit threat is something that we have heard a lot about in recent times. It is still too early to judge the full scale of the issue but recent data shows that UK fund managers could be hard hit.

The problem stems from the fact that up to a fifth of the assets currently managed by the UK’s biggest fund managers is from mainland Europe.

This analysis of the Brexit threat comes from the FT. It was based on the figures from 14 global asset management firms. The figures are likely to add to fears in the city about the potential impact of Brexit on the country’s financial industry.

In overall terms, it has been calculated that British fund managers rely upon investors from the rest of Europe for 13% of the assets they control. Some of the biggest names in the industry have an even bigger slice of their business coming from continental Europe.

The concrete Brexit threat to this industry is that a hard Brexit could see British access to the single market severely restricted. This could have a massive negative effect on the country’s £5.7tn investment industry.

Brexit Threat to Passporting

It could lead to financial service firms being unable to sell their products and service across different countries. Certainly not as easily as they can just now.

Currently, there is no need for British companies to have a physical presence in the countries where they offer services. This is known as passporting and the loss of this ability would be a big blow.

Robyn Grew is the chief administrative office of Man Group. He was quoted by the FT as saying that the industry “wants access to the EU market”.

Another interesting quote came from Helen Morrissey. She is the chairwoman of the UK’s Investment Association. She said that it would be “inconvenient to everybody” if the industry was to lose their passporting rights.

Clearly, a lot of concerned fund managers will be keeping a very close eye on how Brexit plans out.