Brexit: A threat or an opportunity for UK Financial Services?
by Heat Recruitment
On Friday 21st July, I took a trip down to Burges Salmon’s offices in Bristol to an event titled ‘Brexit: A threat or an opportunity for UK Financial Services?’ where the key speakers discussed the potential impact of Brexit on the Financial Services sector in the UK and the challenges it faces in this uncertain time.
The key speakers at the event included Peter Westaway of Vanguard Europe, Mark Garnier the Under Secretary of State for International Trade, Molly Scott-Cato MEP for the South West of England, John Betteridge the CIO of Rowan Dartington and Tom Elliot Lecturer on Political Economy at Kings College London.
One of the main topics discussed at the event was whether or not the UK could maintain its Passporting or Equivalence rights if forced out of the single market.
The passporting system in the EU enables Financial Services firms that are authorised, in any EU member state, to trade freely in any other with minimal additional authorisation. This makes up around 25% of the annual revenue generated from the Financial Services sector every year.
It is widely agreed that if the UK gives up this right that a similar proposal, or waver must be agreed to try and maintain some economic stability. Although with just 18 months left until the UK is set to officially leave the EU time is of the essence.
One way to counter this would be to come up with a temporary deal until the full details of something permanent can be ironed out. Mark Garnier himself admitted that it is hard to see a proposal being put together in the next 18 months that would be fully sufficient in outlining everything required and believes there is a need to agree an interim deal before something permanent can be drafted. His expected time scale for a permanent agreement would be more like 5 years.
What does this mean for recruitment?
Due to the nature of the UK Financial Services market and the fact it is heavily regulated by the FCA, post RDR industry professionals are now required to be highly knowledgeable, technical and fully compliant. This is unlike many other EU states who run an unregulated or more loosely regulated industry. This means the demand for advisers and other qualified financial services professionals alike, is still as high as ever, with UK businesses keen to hold on to and seek these highly sought-after individuals.
You can sure that the government will back businesses as they look to play hard ball when discussing Financial Services at negotiations. It is estimated that Banking and Asset Management businesses bring £132 Billion in annual revenue every year. This contributes roughly to £36 Billion in Tax which, of course, they will be keen to maintain. £1 in £9 made from the Financial Services industry last year was spent on public services, which puts in to perspective the key part the industry plays in our economy.
The last couple of months here at Heat Recruitment HQ has seen the Financial Services division arrange more interviews this year than in 2016 over the same period. Additionally, our figures show that we are up 140% on last year’s placement figures for this time of year. The message from business owners remains the same – ‘keep calm and carry on.’
Mike Garrett is one of our Recruitment Consultants specialising in Financial Services. Connect with him on LinkedIn here or call to have a chat on 0117 922 1771