"Across Europe, the wheels are in motion on relocation and hiring strategies as firms make their ability to serve clients from Day One of Brexit their number one priority."
As of the 10th September, 35% (77 out of 222) of the companies monitored in EY’s Financial Services Brexit Tracker had publicly confirmed, or stated their intentions, to move some of their operations and/or staff from the UK to Europe.
EY's research shows that firms are being more specific about their plans, with 25% of companies confirming at least one relocation destination in Europe, compared with 19% at the end of 2017.
Twenty of the largest UK-based financial services firms so far have confirmed plans to relocate front office roles, comprising 57% of all job relocations tracked. Among the front office roles, the types of positions being relocated include sales, trading and distribution.
Fifteen firms have announced plans to relocate or hire locally for middle or back office roles in Europe – predominantly legal and compliance, risk and oversight positions, clearing and settlements, human resources and IT.
Dublin and Frankfurt remain the frontrunners for relocation, but Luxembourg and Paris are increasingly popular, while Madrid and Milan have gained traction with investment banks.
It is estimated that over 2,500 new jobs have been created or are in the process of being created by financial services firms across Europe for Brexit-related work. Thirty-eight firms have suggested that they have or are currently hiring staff, and around 500 of these jobs are new roles created in London.
Omar Ali, UK Financial Services Leader at EY, commented: “Firms are no longer merely talking about their plans. Across Europe, the wheels are in motion on relocation and hiring strategies as firms make their ability to serve clients from Day One of Brexit their number one priority.
“During the past quarter we have seen the number of companies that directly reference a hard or no-deal Brexit when discussing their plans publicly increase. We know some firms are coming up against roadblocks or delays in gaining license approvals from EU authorities, and unless this position shifts quickly, it increases the risks of a cliff edge to businesses and consumers alike. We are now approaching the wire on Brexit, and to avoid any heightened financial instability, regulatory approvals are urgently required from EU institutions.
“We expect many more firms to publicly announce their relocation plans before the end of the year as they increasingly receive their much anticipated regulatory approvals - our data is a snapshot of the biggest firms, and while many have made their plans public, many are still to vocalise their strategies.
“Over the summer, we have observed many financial services firms start to build their European presence, and largely, there is good progress being made to build capabilities and fill roles in EU destinations. A number of firms have identified Europeans in their UK employment who want to move back home, and many of the more senior roles are being filled with relative ease. But, of course there are inherent challenges and costs to relocating staff and setting up new offices, and something that is becoming increasingly clear is that short-term relocation or commuting to the continent is seen as undesirable - by both local EU regulators and employers - due to the expense, organisational complexities and tax implications.
“With just six months to go, although progress by firms is broadly positive, we are far from out of the woods, and in case of a cliff edge, there is still much work to be done to be ready for Day One of Brexit.”
