"The closer we get to 29 March without a deal, the more assets will be transferred and headcount hired locally or relocated."
As of 30 November 2018, 36% of the companies monitored in EY’s Brexit Tracker had publicly confirmed, or stated their intentions, to move some of their operations and/or staff from the UK to Europe – increasing from 31% over the last twelve months.
This figure rises to 44% for wealth and asset managers and 56% for universal banks, investment banks and brokerages.
In aggregate, 30% of firms monitored by the Brexit Tracker have now confirmed at least one location in Europe to where they are moving or adding staff and/or operations, up from 25% last quarter.
27 companies have confirmed they are moving or adding staff and/or operations to Dublin and Paris has also gained in popularity.
The number of jobs that could relocate from London to Europe in the near future stands at just over 7,000, according to the tracker.
Since the EU Referendum, 20 companies have announced a transfer of assets out of London to Europe. Not all firms have publicly declared the value of the assets being transferred, but the Brexit Tracker has followed public announcements worth around £800 billion.
However EY believes this number is still modest given total assets of the UK banking sector alone is estimated to be almost £8 trillion but may become larger as we move towards Brexit.
Omar Ali, UK Financial Services Leader at EY, commented: “In anticipation of the Parliamentary vote in January, the City will be watching closely to see if the proposed Brexit deal will be accepted or whether it’s back to the drawing board for the Government. As things stand, and per regulatory expectations, financial services firms have no choice but to continue preparing on the basis of a “no deal” scenario.
“The City is further ahead in implementing its Brexit contingency plans than many other sectors and our numbers only reflect the moves that have been announced publicly. We know that behind the scenes firms are continuing to plan for a “no deal” scenario. The closer we get to 29 March without a deal, the more assets will be transferred and headcount hired locally or relocated. Inevitably, the contingency plans are for Day 1 only, and in the event of “no deal” will represent the tip of the iceberg as longer-term plans will be more strategic and extensive than those publicly announced to date.
“Deal or no deal, financial services companies’ main priority is to protect their customers and investors from any post-Brexit fall-out and operational decisions are following a “prepare for the worst, hope for the best” strategy. Whilst roles will no doubt move from the UK, many firms are only moving those employees deemed essential and are hiring locally given the expense of relocation.”
