The Courier & Advertiser (Fife Edition)
Brexit threat to UK investment sector if funds moved abroad
Brexit could have huge ramifications for the UK’s investment industry, which manages more than £1.2 trillion worth of assets, a new report has warned.
An annual survey by the UK’s Investment Association (IA) warned that the EU referendum result could ultimately dent the industry, which manages 37% of all European assets – more than the German, French and Italian industries combined.
“Whether the UK retains its position as a centre of excellence for asset management could be partly determined by whether overseas clients, particularly those located in mainland Europe, exhibit a preference post-Brexit to repatriate their asset management activity within the EU,” the report stated.
“It remains unclear what the relationship between the EU and the UK will be like post-Brexit, but the decision to leave the EU may have ramifications for all industries.”
The IA said the survey results raise important questions over whether Brexit will have a commercial impact on the industry and regulatory environment, and whether firms will relocate staff or set up shop in the EU.
More than 37,000 people were directly employed by the UK’s investment industry in 2015, a 5% jump from a year earlier.
That number rises to 92,000 when including people indirectly employed by the industry, in positions related to asset management, including fund and administration activities.
London and Scotland are still “key centres” for the industry, but the IA stressed that firms have spread across the UK.
Investment management accounts for 6% of Britain’s total net service exports.
Chris Cummings, chief executive of the IA, said: “The industry is now considering the ramifications of Brexit in earnest and the focus must be on seizing the opportunities that are being presented to continue to grow the UK’s investment hub globally.”