The looming shadow of Brexit is hard to shake off and financial services, like most UK businesses, doesn’t like uncertainty. But despite the talk of doom and gloom with jobs disappearing in this part of the financial sector, surprisingly perhaps, we are seeing a different picture.
The Chartered Institute for Securities & Investment (CISI) is the professional body for those working in the wealth, capital markets and financial planning professions.
We provide entry-level qualifications which are a useful hard indicator for the number of new staff entering the UK financial services profession, which in itself is a useful barometer of its current health and confidence.
Figures for new CISI qualifications taken in the last 12 months to 31 October 2018 show that these sectors of the UK financial services profession have recovered strongly from its low point in March 2017.
Data to October 2018 indicates that this profession has expanded significantly and is now at its highest level since April 2015 and the second highest level for well over five years.
Just prior to and immediately following the Brexit vote, we saw firms significantly reduce their recruitment programme by 15 per cent or over 4,000 jobs.
Over the last two years, as confidence has returned, business has expanded, more staff have been hired and we have seen an increase in demand for entry level qualifications in every month since March 2017. It is likely that there was a small increase in examinations as firms prepared to become Mifid compliant, however this probably
reduced the severity of the fall rather than accounts for the recovery, as firms needed to be compliant by the start of Mifid (i.e. January 2018) and therefore needed to ensure that their staff met the requirements by then.
The scale of the surge in recruitment suggests that the profession is surprisingly resilient given that many firms are activating contingency plans in case of a hard Brexit and some are opening small satellite offices in other European jurisdictions.
It is also notable that during 2018 there has been a significant acceleration in the number of people taking our qualifications, suggesting that firms made a conscious decision to expand in the year, having scaled back hiring in 2017.
Whether this optimism will continue into 2019 is less clear, but our research among wealth and financial management firms suggests that domestic demand remains buoyant, and that a number of organisations who are opening offices in the EU to secure their firms’ financial passports are doing so with as few people as possible, partly because the UK in general, and London in particular, remains a highly attractive place to live and people don’t want to move.
Given that it appears that things are not quite so gloomy despite the current dip in general consumer confidence, should we manage to negotiate an acceptable deal, then it is quite possible to believe the chancellor when he says there could be a Brexit dividend.
Simon Culhane is chief executive of the Chartered Institute for Securities and Investment