Talking Point 

Brexit is by far the biggest client fear

Brexit is by far the biggest client fear

Brexit uncertainty and the future of the UK's economy when we leave the European Union is the biggest fear preying on clients' minds, advisers have said.

A snapshot poll carried out by FTAdviser among readers this month revealed Brexit was the biggest worry for clients, according to 64 per cent of the advisers responding to the question 'What is the biggest concern for your clients at the moment?'.

Global politics, even including rising tensions between North Korea and the US, only chalked up 17 per cent of the vote, while inflation - at 6 per cent - and interest rate rises - at 13 per cent - seemed to be barely bothering clients, according to the FTAdviser Talking Point poll.

With the uncertainty around what Brexit will entail, and how this might affect the UK economy, the overall financial stability of the country appears to be in the hands of politicians, which worries some investment advisers.

Guy Stephens, technical investment director for Rowan Dartington, said: "Whatever your political persuasion, this is not good for economic and consumer confidence.

"The recent interest rate rise and the preceding guidance from the Bank of England have stopped speculators shorting sterling and provided some stability.

"That said, if the Brexit negotiations do take a decisive turn towards a ‘no deal’ scenario, which is now being seriously considered in Brussels and on Wall Street, then we would probably see a leadership challenge.

"Weak leaders are always bad for economic growth, especially when the alternative is so polarised in political views."

Mr Stephens added: "Businesses cannot invest on a three-year view if they don’t have the stability of economic and tax policy.

"The UK’s productivity growth is already demonstrably inferior to that of other G7 countries and without clarity soon, this will remain dormant and fall further behind."

Just last week, FTAdviser reported that Conservative MP John Redwood, a prominent advocate of the UK leaving the European Union and chief strategist for investment firm Charles Stanley, had been urging investors to reduce their exposure to UK assets as a result of Brexit fears.

However, there are many other concerns on the horizon that the lay investor might not know about, but which are more pressing on the financial services industry. 

According to the Tax Incentivised Savings Association's (Tisa's) annual report, Brexit concerns are outgunned by the incoming Mifid II regime, which will be law from 3 January onwards, despite being a European Union regulation.

In the report, Jeffrey Mushens, technical policy director for Tisa, wrote: "Regardless of Brexit, Mifid II continues to apply to UK financial services and will be incorporated into UK regulation in January 2018.

"This is a significant piece of regulation which will have a major impact on the financial services industry, requiring a great deal of preparation over a tight timescale."