Passporting is the main issue which UK advisers should be concerned about during the Brexit negotiations, according to Paul Stanfield.
The secretary general of trade body the European Federation of Financial Advisers and Financial Intermediaries said the ability to operate across the continent should not just be a concern for large providers.
“One of the potential key issues is that at the moment it is relatively easy for UK advisers to advise their clients who emigrate to other European countries,” he stated.
“Given the number of people who emigrate from the UK every year, and the fact most tend to be high earners or high net-worth individuals retiring early, they are more likely than the average person to have a financial adviser, so there is probably an increasing number of expat clients in a UK adviser’s client bank.
“It is very unsure at the moment as to whether the referendum will affect this, because we just don’t know what arrangements are going to be agreed between the UK and the EU.”
Negotiations into the UK’s future relationship with the EU after it voted for Brexit on 23 June have yet to get underway, but there are several options available.
One is to become a member of the European Economic Area like Norway, which will give access to passporting rights.
Switzerland is not an EEA member, but it has signed special bilateral treaties with the EU, allowing general insurers access to its markets, while it contributes financially towards EU projects.
Meanwhile, Canada is on the verge of completing a trade deal with the EU, but this excludes access to the EU market for financial services.
Mr Stanfield said his preference would have been to remain in the EU, but in the absence of this he said the UK should seek as much trade access as possible.
“The key aspect is easy and cost effective trade links with Europe, but that goes for just about every industry,” he said. “We certainly wouldn’t want it to become considerably more difficult to do business in Europe.”
Mr Stanfield was also sceptical about the idea that leaving the EU would lead to a bonfire of regulation, echoing comments that have been made by a number of experts on this issue who stated the UK’s access to the European market will depend on continuing to follow its rules.
He said: “The FCA seems to feel that the criteria for Mifid II are such that it would bring it in itself if it wasn’t happening. If we wish to carry on trading with Europe, we are going to have to meet the European standards with regulation.
“I don’t see that as a major issue, because generally speaking, the UK has been ahead of Europe or has gold-plated EU regulations.”
EU directives transposed into UK law will, in principle, remain unless changed by UK statute. EU regulations, however, are EU laws and it is less clear whether they would continue as part of UK law.
damian.fantato@ft.com
