BrexitApr 25 2017

Third of IFAs see Brexit as an opportunity

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Third of IFAs see Brexit as an opportunity

Data from GAM indicates the perceived threat of the Brexit deal could be tapering, despite political uncertainty storming the list of big investment risks. 

According to a survey of 100 advisers, more than a third see the UK’s divorce from the European Union as an investment opportunity rather than a threat.

It was not all doom and gloom over Donald Trump’s presidential win either, with nearly a quarter of advisers viewing this political event as an opportunity.

Despite this, political risk topped the list of big investment risks, with nearly three-quarters of advisers saying they were worried about the impact geopolitical events could have on portfolios. 

 I see our actual withdrawal as a threat at worst and a highly difficult challenge at best. Blair Cann

This comes as concerns mount over the upcoming European elections, with markets breathing a sigh of relief after centrist Emmanuel Macron came a step closer to winning France's presidential election on Sunday (23 April).

European equities have been an overweight in GAM’s portfolios over the past year.

However, Charles Hepworth, investment director at asset manager GAM, said: “We have gradually trimmed exposure to a broadly neutral weight to lock in strong performance ahead of the French and German elections. 

“We are positioned underweight to UK equities as a great deal of uncertainty surrounds the UK’s exit from the EU.”

Mr Hepworth, who is responsible for managing outsourcing solutions for British IFAs, said equities would be a key driver of returns in the year ahead. 

GAM is currently overweight equities and alternatives, particularly property-related securities and gold in the alternative space.

It remains underweight to traditional government bonds, and is staying exposed to lower duration bonds and selected areas in credit.

 I think one third of my peers must be whistling in the dark. Blair Cann

Blair Cann, certified financial planner at Hertfordshire-based M Thurlow & Co, said: "As a committed and unrepentant Remainer, I see our actual withdrawal as a threat at worst and a highly difficult challenge at best.

"I cannot see that the effect of leaving the EU on our overall economy will be anything but adverse."

While Mr Cann said final Brexit arrangements could reduce the impact in markets, he questioned why the countries remaining in the EU would do the UK any favours.

"In view of the uncertainties about what happens next and what the precise terms of our leaving will be, where are the opportunities?

"I think one third of my peers must be whistling in the dark."

katherine.denham@ft.com