finance

Financial services firms continue to relocate jobs to the EU – but changes since Brexit are small



UK financial services firms are continuing to move jobs and assets to the EU, although the shift has been smaller than many had anticipated.

According to the latest data from the EY Financial Services BrexitTracker , 43% – or 95 out of 222 firms monitored – have publicly stated they have moved or plan to move some UK operations and/or staff from the UK to Europe.

This takes the total number of job relocations since the EU Referendum to almost 7,600 – up from 7,500 in October 2020.

The research revealed that 24 of the largest financial services firms – 10 banks, nine insurance providers and five wealth and asset managers – have so far transferred or announced an intention to transfer assets out of the UK to Europe due to Brexit.

Not all firms have publicly declared the value of the assets that could be transferred but, of those that have, the tracker estimates the figure to be almost £1.3trn – up from £1.2trn in October 2020.

The negative financial impact of leaving the EU is still being felt by some in the sector.

More than a quarter of firms have publicly stated that Brexit is impacting or will negatively impact their business, up from 49 firms in January 2020.

Sue Dawe, managing partner for financial services at EY Scotland, commented: “After the major hurdle of standing up new EU hubs, the days of significant swathes of asset and job relocation announcements appear to have passed.

“Looking ahead, the UK, and Scotland’s place within it, as a leading global financial centre will be as focussed on building relationships and competing with markets beyond European borders as it will be on building its new relationship with the EU.”

Read More   Make the most of Rishi Sunak’s £2bn greener homes scheme with savings on insulation and double glazing

Since late December 2020 and in the two months since the Brexit deal, 10 financial services firms have publicly urged the UK Government and regulators to ensure that the UK sector remains competitive and open for business.

Public statements include calling for an operating environment that is accessible to both local and international trade and services businesses, and assurance that London does not lose its grip on its role as a key European trading hub.

Since late December, four global wealth and asset managers with combined assets under management of over $10trn have called for greater clarification over the UK’s future regulatory regime, arguing for greater alignment rather than divergence from Europe, focused on establishing a flexible, co-operative, relationship with the EU.

Omar Ali, EMEIA financial services managing partner for client services at EY, added that UK and EU firms are now awaiting the detail of the upcoming Memorandum of Understanding on Financial Services and will shortly face into a new round of Brexit discussions on the framework that will ultimately define the future relationship.

“The challenges remain significant, and, as recent headlines evidence, the push and pull of markets across Europe for business historically led from the UK continues.

“Fragmentation of European financial services will serve to only benefit the US and Asia, but these challenges can be overcome if the right areas are prioritised – although passporting and equivalence debates command the headlines, there are arguably far more complex matters involving data, capital, skilled talent and frictional costs, that need to be settled.”

Read More   Johnson survives TV debate with few cuts and bruises

Since the 2016 referendum, 40% of firms monitored by EY have confirmed at least one location in Europe where they are or are considering moving or adding staff and/or operations to, while 12% have confirmed multiple locations in Europe.

Dublin remains the most popular destination for staff relocations and new European hubs or offices, with 36 financial services firms saying they are considering or have confirmed relocating UK operations and/or staff to the city.

Luxembourg is the second most popular destination and has attracted 29 companies in total – 14 wealth and asset managers and six banks or brokerages.

Frankfurt has attracted 23 companies in total – 19 of which are banks or brokerages – while 20 firms say they are considering or have confirmed relocating operations and/or staff to Paris – 14 of which are banks or brokerages.

Don’t miss the latest headlines with our twice-daily newsletter – sign up here for free.



READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.