Questions have been raised by the Investment Association over whether British fund managers can continue to run the £1.2trn assets on behalf of European investors when the UK detaches itself from the EU.
The trade body warned there would be wider ramifications on jobs, as the UK alters its access to the European market.
According to an asset management survey from the IA, some of its members indicated that being headquartered in the UK could in fact complicate their activities once Britain has left Europe.
The report said some funds could choose to “repatriate their asset management activity within the EU”.
The IA questioned if there would be a disruption to client services, and also queried whether it would be straightforward for fund managers to manage European funds and clients from the UK.
Chris Cummings, chief executive of the Investment Association, said the asset management industry will need to “work hard” to help ensure there is a commercial environment that lets firms deliver to clients in the UK, Europe and internationally.
The report pointed to assertions the financial services sector could suffer worse than the wider economy following the Brexit vote, which is said could hinder the UK’s position as a global financial centre.
This comes just days after a think tank revealed there had been an "uncharacteristic downturn" in the number of job vacancies across the UK's financial services sector since the Brexit vote.
The IA also pointed out, that if the UK continues to serve the European market, it will still have to abide by European regulation.
It warned that as the UK departs from the EU, it no longer has a voice to influence EU regulatory change, adding there is danger of becoming a “decision taker” as opposed to a “decision maker”.
“Equally there may be consequences for the regulatory direction of travel within the EU itself, which has historically been heavily influenced by the Financial Conduct Authority and its predecessors.”
The report stated it is “impossible” at this stage to determine the impact of a UK exit from the EU on staffing numbers in and around the asset management industry.
“However, firms interviewed this year noted that the long-term impact of Brexit would need to be judged in terms of future location of new capacity in Europe as much as potential relocation of existing personnel.”