Surveys
UK Financial Professionals Increasingly Expect "Hard" Brexit

More UK-based financial services professionals expect the UK to leave the European Union without a deal although survey evidence does not suggest a dramatic shift in sentiment either way since a year ago.
Financial industry professionals living in the UK are less
confident that the country will achieve a “soft” departure from
the European Union than they did in 2017, with a slight increase
in the number predicting Britain will leave the bloc with no
deal.
Separately, a UK wealth management lobby welcomed official calls
to enable continued migration to the UK without discrimination
against those from outside the EU.
The findings come from CFA UK and a poll of 800 of its members.
(The organisation is part of the CFA Institute.)
Whereas 67 per cent expected a soft Brexit this time last year,
just 58 per cent do today. The number that expect a hard Brexit
has increased from 17 per cent to 22.5 per cent and the number of
respondents that have no view has also increased from 16 per cent
to 19.5 per cent. UK respondents are most likely to expect a hard
Brexit (26 per cent) – the term describing a departure with no
deal and reliance on World Trade Organisation upper limits on
tariffs.
EU respondents are least sure about the outcome (24 per cent) and
other international passports are most likely still to expect a
soft Brexit (72 per cent).
The poll was issued in the same week as UK prime minister Theresa
May haggled with EU member countries over her government’s
plan to adopt certain EU Single Market rules as part of a
settlement. Her “Chequers Plan” – named after her official
residence in Buckinghamshire where a set of proposals was put
forward to cabinet colleagues – has been criticised by some
pro-EU members of parliament as being unrealistic, leaving the UK
with no influence but having to comply with EU red tape. MPs who
want a more complete break from the EU, such as former foreign
minister Boris Johnson and ex-minister Steven Baker, have
condemned May’s plan for giving the UK Brexit “in name only”.
Among other parts of the CFA poll, it was revealed that the
number of investment professionals who expect to leave the UK has
risen by 9 per cent to 11 per cent, but this is based on a large
increase in the number of British investment professionals who
now expect to leave (9 per cent up from 5 per cent). The number
of EU investment professionals that expect to stay has actually
increased (from 43 per cent to 49 per cent) and there has also
been a slight increase in the number expecting to leave (16 per
cent last year rising to 17 per cent this year). Overall, the
number expecting to stay in the UK has increased from 68 per cent
to 69 per cent.
The survey authors said more people feel that their jobs are at
risk from Brexit. Last year, 60 per cent of UK respondents felt
that their jobs were safe. Now, just 54 per cent feel the
same.
More than three quarters of all respondents (77 per cent) said
that Brexit made the UK less competitive as a financial hub.
The impact - positive or negative - of Brexit and how it works
out in practice is a hotly-disputed topic. Firms such as banks,
asset managers and brokerages are seeking as much clarity as
possible to judge whether or when to adjust operations, such as
whether they should build subsidiaries in the EU to ensure
continued market access. A vexed issue is "passporting" - whether
financial services run out of London can be sold across the EU,
as at present, post-Brexit, without costly registration and
approvals. Among recent developments, UBS, the Swiss bank, said it was
relocating
its European headquarters to Frankfurt, Germany, after
Brexit. Debate continues over how large any impact will be. With
technologies such as blockchain and AI potentially affecting many
types of jobs, it is arguable that technology, rather than
Brexit, will have a bigger impact on financial employment in the
next few years.
Labour markets
Earlier this week the Migration Advisory Committee, an official
body advising policymakers on issues such as immigration, said
that lawmakers should not give preference to EU nationals for
visas following Brexit.
The Personal Investment Management and Financial Advice
Association has welcomed the Committee’s report - with one
caveat.
“PIMFA welcomes the publication of the MAC Report with its
emphasis on retaining as much freedom as possible for the
movement of highly skilled labour, and recommending the abolition
of the Resident Labour Market Test, thus permitting the continued
inward flow of workers bringing economic benefits to the UK,” it
said.
“As part of this report, PIMFA would like to have seen the MAC
Report reflect the fact that we advocated, in our response to the
Call for Evidence, a certain preferential treatment for EEA
[European Economic Area] citizens and would hope that the policy
formulations resulting from the MAC Report will take this into
account,” it added.