The UK’s leading wealth management and financial advice association, PIMFA, has raised concerns on the potential impacts of a ‘no-deal’ Brexit.
The association worries how it will affect private investors and PIMFA’s member firms.
PIMFA told IFA Magazine that a hard Brexit would be disruptive and expensive for its members. It also said that the people who would ultimately pay for any increase in costs or reduction in investment possibilities would be the clients of its firms: “These are often ordinary individuals and families who in many cases are voters. In order to avoid this consequence for ordinary citizens, PIMFA has consistently argued that a no-deal Brexit must be avoided and that a broad-ranging and well-founded UK/EU agreement based on the principles of mutual recognition should be in place by the end of a transition period.”
John Barrass, PIMFA Deputy CEO, added: “At present, focus is on the application of ‘enhanced equivalence’ rather than mutual recognition, but equivalence does not apply to dealing with clients in the retail investment sector so, unless the final delineation of enhanced equivalence changes this, there will be no effect on the position of PIMFA firms”.
“PIMFA has repeatedly made it clear that an orderly, 3-phase approach to Brexit is both essential and achievable. This necessitates securing consensus around a Withdrawal Agreement in phase 1 to include a transition period as the core of phase 2 in which the final agreement for phase 3 is negotiated and agreed. The aim is to secure a one-step Brexit at the point of implementing phase 3, which firms can be aware of and plan for well ahead of time. This would minimise disruption and the costs of changing to business patterns suitable for a non-EU state”.
PIMFA has called upon the government, EU member states, and the European Commission and Parliament, to ensure that a proper phase 2 with a minimum transition period, as enshrined in the March 2018 version of the draft Withdrawal Agreement, is retained and not sacrificed in negotiations on the principles of the phase 3 agreement.
This would lead to a no-deal Brexit that would be damaging across the board for EU members, including to all PIMFA members and their retail clients.