Sinead Moore 9 Jan 2017 01:31pm

Financial services firms already moving operations out of UK

The fourth quarter of 2016 saw a spike in the number of financial services firms considering relocation from the UK following the Brexit vote, with half of those firms already beginning to move operations elsewhere, EY has warned

According to EY’s Brexit Tracker, which tracks the public statements made by over 200 of the largest financial services companies with significant operations in the UK, financial services firms made 381 public announcements on the impact of Brexit on their businesses over the last six months.

Of the 233 companies monitored, 38 (16%) voiced their intention to bolster EU subsidiaries, move staff abroad or relocate headquarters in the wake of the EU referendum result and over half of these firms have actively set these plans in motion.

According to the monitor, wealth and asset managers have been the most vocal overall in announcing the impact of Brexit on their businesses, accounting for over a third (36%) of all public pronouncements across the financial services sector.

EY found that investment banks have been the most vocal financial services sub-sector to comment on making operational changes, with almost a third (29%) announcing their intention to either move staff abroad, consider re-domiciling their European or global headquarters or bolster existing teams on the continent.

Investment banks have also been the most vocal sector on passporting, domicile and staffing concerns, making 84 pronouncements over the past six months, 25 of which were made in the last quarter.

While firms are actively looking at their options post-Brexit, Omar Ali, UK financial services leader at EY, highlighted that those firms choosing to relocate are still in the minority.

“Ahead of the government triggering Article 50 [...] we’re now seeing more financial services firms talking publicly about the potential to relocate some of their operations. But this is still a minority of firms,” he said.

“The FS industry is quite rightly taking its time to consider all options and see how the negotiations works out. Reviewing options early on is simply good business practice and required by regulators. Customers expect to continue to be served,” he added.

Going forward, Ali expects the UK’s “global reputation for talent, innovation, high quality service and easy access to finance, alongside our attractive legal and regulatory framework, and pro-business attitude” to play an important part in the decision making.

“The ecosystem that has been built up across the UK is unique. We have a close-knit network of industries that work well together having been built up over many, many years. We shouldn’t be complacent and allow that to be lost. 2016 has been a year of extraordinary, and often unexpected change.

" As we enter 2017, we need to ensure that we make the best of that change and work hard to protect and grow the UK financial services sector and help it continue to prosper,” he said.