The stage is set later today for one of the most pivotal moments in modern European history. The clock will start ticking on the 730 day timeframe that the UK has to leave the EU and detach itself from 44 years of membership of European economic and political union.
While politics will inevitably be a big driving force in the Article 50 negotiations, many businesses are hoping that economic imperatives and pragmatism will act as a counter to some of the more heated national debates. Our industry must look for the opportunities in Brexit to thrive, rather than just survive – opportunities to further enhance the UK as a global financial centre but also as a marketplace for asset management that works for European and international savers.
As a sector that represents £5.7 trillion of the world’s investments, the UK’s asset management industry is readying itself for life outside the EU and is focused on continuing to provide its services to millions of savers around the world.
Like many other industries, the asset management sector at large has had an open and positive dialogue with policy-makers over the past nine months, emphasising the economic and social importance of a mutually beneficial deal between the UK and the EU.
To achieve this goal, we believe government should seek a bespoke deal that hinges on mutual market access, access to international talent, legal certainty and preserving the UK’s financial services ecosystem.
UK-based asset managers currently run around 40 per cent of Europe’s investment management assets. We have a real responsibility to investors at home and right across the EU.
Mutual market access will be crucial to safeguarding the interests of UK and European savers and their ability to access financial products and services provided by asset managers. As ageing populations place ever greater strain on public finances across Europe, there is a need to encourage public engagement in pensions and long-term savings.
Policy-makers are intervening to transform the retail investment market as the investment management industry’s role in society becomes more important. At the same time, fiscal policy and the global banking crisis have increased the need to provide alternative sources of finance for, among other things, SMEs, infrastructure and green finance, all of which are increasingly funded through investment managers. The motivation for supporting an industry that can provide solutions to both of these issues is clear.
The most heated of all negotiations, however, is bound to surround immigration issues. We share the City minister’s desire for all industries to continue “reaping the benefits of the world’s best talent”. Our industry is built on its people and their expertise, so it is crucial that our country’s thriving financial services industry continues to attract and develop the very best of home-grown and international talent.
Our firms also need regulatory certainty and enough time to implement and adapt to a new regime in the post-Brexit world. This is paramount to ensure the interests of European savers and investors are protected.
Looking ahead to the next two years of negotiations, Westminster, Brussels and other European capitals would do well to view Brexit as an opportunity for positive change, not just as a race to protect national interests. While many EU leaders have repeatedly said that there can be no UK “cherry picking”, there are clearly opportunities for positive change to be had across Europe.
As the Prime Minister said, we may be leaving the EU but we are not leaving Europe. Our industry will be working hard to support policy-makers over the next couple of years as they hammer out a deal that protects the interests of savers and one that will allow UK and European businesses to continue to flourish.