Seventeen asset managers with “significant” operations in the UK have publicly said that they are moving or considering moving operations or staff to other EU countries because of Brexit.
The figure was published in the EY consultancy’s latest quarterly Brexit Tracker which monitors the public statements of 222 of the UK’s largest financial services firms.
Firms surveyed include universal banks, investment banks, brokerages, wealth and asset managers, retail banks, private equity houses, insurers and fintech firms.
The report found that 66 (up from 59 in July) or 30% of the largest financial service firms in the UK have either confirmed or are considering transferring some of their staff or operations abroad as fears grow of a “hard” Brexit – in which the passporting of services becomes hard or impossible and where UK-based firms lose the ability to trade with the rest of the EU through failing to qualify under equivalence rules.
So far financial service firms have committed to transferring 1,500 members of staff from the UK to rival financial centres in the EU.
However this number is expected to grow, with six of the major investment banks having made public statements that as many as 13,000 jobs were at risk of being relocated from the UK in the case of a hard Brexit.
Three per cent of firms have said that more than 400 jobs could have to move, while 4% have said that fewer than 100 would have to go.
The report found that Dublin and Frankfurt are the preferred destinations for those firms that have announced where they are to expand post-Brexit. However some firms are expanding in more than one EU city.
So far, 13 firms have said they will move to Dublin, 12 have named Frankfurt with six choosing Luxembourg.
Omar Ali, EY’s UK financial services leader, said that the number of jobs that firms have committed to moving to Europe is still “relatively small” at around 1,500 jobs as firms are, at least for the moment, only moving the minimum number that they have to.
“The industry is still getting ready for a cliff edge, and it’s too early to say if the intent to secure a transition period is going to be sufficient to slow down or change the work firms are doing on their contingency plans,” he said.
“We have to assume that across the whole financial services industry and broader ecosystem the impact would be much greater.”
On Thursday the City of London, was warned by the European Banking Authority (which will itself relocate from the UK post-Brexit) that the UK’s financial sector would not be allowed to use shell firms based in the one of the 27 remaining EU member states in order to access the single market.
The opinion paper, which confirms similar thinking by the European Securities and Markets Authority earlier this year, effectively dashes hopes that equivalence rules could be used to continue operating in the EU through the opening of “letterbox” offices in other countries employing only a token number of staff.
©2017 funds europe
