Brexit F21 News | August 2, 2018

Brexit: Challenges and choices for UK wealth, alternative investment firms

First published by WealthBriefing on 5 June 2018

Rosalyn Breedy considers the opportunities and problems that Brexit brings for UK wealth and investment managers, in an article written for WealthBriefing:

Last July the European Securities and Markets authority instructed EU 27 national regulators on the need to deliver a consistent supervisory approach to investment management. As a consequence of which UK investment managers looking to move to a “light – touch ”  jurisdiction will find their ability to do so severely constrained. UK managers will do well to read the opinion as it also provides a good summary of the Brexit challenges faced by UK wealth and alternative investment managers.

UK Managers need as a matter of priority to conduct a Brexit impact assessment if they haven’t already and to determine whether or not they need to establish a presence in an EU member state. If they do need to establish a presence the key questions are in which state and by what means. It is not always the case that the regulatory environment most like the UK yields the best result with regard to the costs and ability to provide services. Key staff may also not wish to relocate to certain jurisdictions.

Consultation with relevant stakeholders and careful evaluation of outsourced providers is key.

The establishment of a framework approach will enable managers to provide a consistent approach to clients, counterparties and regulators. The framework approach incorporates all the applicable rules and provides a comprehensive approach to risk management and governance as opposed to minimum standards of local compliance and heavy reliance on reverse solicitation by alternative investment managers.

UK managers should also take the opportunity to review business processes, outsourcing and see whether technology can be used to cut costs and artificial intelligence to enhance service offering.

UK managers who can adapt well to the post-Brexit environment have the ability to seize new business.

WealthBriefing subscribers can read the full article here.