Financial advisers are not the most obvious cheerleaders for the EU, and neither are their businesses. Typically, an intermediary will focus on UK-based clients, rather than dealing with individuals or entities overseas. And on a personal level, some advisers have proved to be vocal advocates of the decision to leave the EU, set down in 2016’s referendum.
Neil Liversidge, managing director at West Riding Personal Financial Solutions and a campaigner for Brexit, says: “The EU is getting less and less realistic and efficient. I am massively positive on Brexit and support it wholeheartedly.”
And as controversy around the introduction of packaged retail and insurance-based investment products (Priips) and Mifid II rules has demonstrated, cross-continent financial services regulation often seems to bring nothing but greater complexity.
But even those positive on the post-EU future are aware of the extensive work that lies ahead. As Mr Liversidge notes, leaving will certainly involve “challenges”, and, with less than a year to go until the UK is scheduled to officially depart the bloc, the form or likelihood of this departure remains far from clear.
A transitional period, under which current arrangements are maintained until a deal is completed, has now been agreed until the end of 2020. But in many ways this just extends the uncertainty. No information has yet emerged about the detail of future trade deals with the EU and other countries, nor on a range of other questions ranging from the Irish border to the status of protected goods.
This uncertainty has knock-on effects for consumers, businesses and the broader UK economy. When asked by Money Management to highlight the potential effects of Brexit on their working lives, and how to prepare for these scenarios, many advisers and industry commentators struggled to provide an answer.
This lack of clarity, and the volatility of possible outcomes, has unnerved some in the advice space, despite a broader sense of optimism in the industry.
Research published by Aegon late last year saw 81 per cent of respondents say they had seen turnover increase in the past 12 months. The same proportion expected this to continue into 2018, but Brexit has presented a dark cloud on the horizon in the eyes of many. Seven in 10 advisers said they feared that domestic political volatility and eventually Brexit itself could derail this growth.
Other findings in the report are more divisive. Some 21 per cent of the advisers surveyed viewed Brexit as an opportunity, but 40 per cent were concerned it could hurt their business. As such, firms would be well served by understanding how they could be affected by the changes ahead, and how to best prepare where possible.
On a professional basis, advisers have found client concerns centre on their individual portfolios rather than the wider implications of Brexit. That implies more regular updates on the part of intermediaries, reassuring clients where necessary – particularly in the event of market ruptures.
Al-Karim Parpia, a director at advice firm Just Financial Group, says: “With any uncertainty, whether it’s Brexit or American trade wars, the way to deal with clients is communication.