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.
“I don’t think they are saying they like [Brexit] or don’t like it. They are saying, ‘You have our money. What does the situation look like and should I be doing anything differently?’”
Mr Liversidge adds: “Good communication with clients is absolutely essential at all times.”
As such, those issuing regular communications to clients would do well to focus on the progress of Brexit negotiations, and how markets and the UK economy are behaving.
Intermediaries could explain how they, or others acting for the client such as discretionary fund managers, are reacting to events, or why they are maintaining their current strategy if this is the case. This work will also pay off for the firms involved because it ensures they are up to speed with current developments.
Overseas clients
For those intermediaries who do work with overseas clients, technical difficulties are much more likely.
John Barrass, deputy chief executive of the Personal Investment Management and Financial Advice Association (Pimfa), which represents the likes of advisers and wealth managers, says a minority of the industry body’s members have such clients, but warns problems could emerge because of differences in rules between countries.
He says: “You may have a client in the EU. If you have a client in France, they can call you, but if you call them back, that might count as solicitation. It’s a blurry area.”
Others have highlighted specific areas where snags could appear. Mr Parpia, who deals with ultra high-net-worth individuals, uses Dublin-domiciled bonds.
“If there’s a hard Brexit, I might have to unwind that [position],” he notes. “I’m 99 per cent sure there will be a deal, but there’s a 1 per cent chance [it may not happen].”
A related issue to consider is that of ‘portfolio delegation’, a subject of particular concern to asset managers. They fear that the EU could prevent Dublin and Luxembourg-domiciled portfolios being run by managers based outside the bloc. Once thought unlikely, a pledge by the European Securities and Markets Authority to look closely at this area has put fund firms on guard. Intermediaries who invest in these portfolios should also keep a close eye over the coming months and years.
Positioning
