Monday, 20 March 2017 | Prepared by Rajiv Jaitly, Managing Partner of Jaitly LLP
Although there are opinions by the yard as to what Brexit will mean – whether for financial services or otherwise – it is essentially nothing more than speculation on what might be – however educated or well informed. In the UK there was life before passporting and, believe it or not, life would continue if passporting were to come to an end.
Theresa May’s January speech at Lancaster House did give one crumb of comfort, which was that the City of London would not be required to make cliff-edge changes and that any changes would have a suitable transitional period for change; and, let’s face it, asset management firms have had to adjust to many regulatory changes over recent years and they have shown a resilience and ability to weather many of the political and regulatory storms. After all, isn’t that what stress testing is all about?
Perhaps of more significance to wealth managers and asset managers in the face of Brexit is the publication of the interim report on the FCA market study on Asset Management (MS15/2.2). One may wonder if it provides the product development teams at Wealth Managers, who are facing the uncertainties of Brexit, a real opportunity to design and present a disruptor model that might grab the attention of investors anywhere in the world and cause them to beat a path to the door of that UK investment manager.
One of the problems with regulation in asset management has been the lobbyists acting on behalf of European asset management to erode the dominance of the City of London. Brexit gives the City an opportunity to look at the regulatory model again and make it fit for the 21st century by transforming the way that it serves the interests of the City of London and its investors. But I have already talked about the futility of speculating on something for which there is no precedent. Is there something that firms should be thinking about in the cold hard light of day that would create opportunities whatever Brexit looks like or means?