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Will Goodhart of the CFA Society UK is seen speaking at an industry conference, 18 January 2018. Goodhard said of a CFA Institute study released this week:“In light of the uncertainty over how the Brexit trade deal negotiations will play out, an increasing number of survey respondents in firms with a strong UK presence expect to see that presence reduce. Respondents, whether from the UK, EU or rest of the world, are also pretty clear that restricting delegation arrangements would have a negative effect on investor outcomes.”Photo credit: CFA UK 

Only 17% of UK respondents in a study conducted by the CFA Institute believed “the negotiations will result in a comprehensive trade deal between the UK and EU27 covering both goods and services.”

The figure was 28% for investment executives located outside of the UK.

Globally, around a quarter predicted that Brussels and London would strike “a trade deal covering goods only”, similar to the recent EU-Canada agreement.

One in five said the UK would “crash out” of the bloc, with no trade deal finalised by March 2019.

This is all according to the “Global Brexit Barometer 2018” (PDF), released on Tuesday.

Delegation

Just under half (49%) in the UK said that “restricting delegation arrangements will have a negative impact on investor outcomes.” The figure was 33% for respondents located in the rest of the EU. But a larger number, outside the UK, were “not sure” about the impact of limiting fund delegation.

Delegation of tasks is common for Luxembourg-domiciled funds, such as having portfolio managers based in other countries.

The barometer also found that:

  • 51% in the UK and 39% in the EU27 think “the UK will maintain regulatory alignment” after leaving the bloc;
  • 68% in the UK said Brexit had “caused the competitiveness of their market to deteriorate” (down from 70% in February 2017), while only 3% outside the EU thought so (down from 5% in February 2017);
  • 63% of all survey-takers thought investment firms, in light of Brexit, would “reduce their presence in the UK” (up from 57% in February 2017), while 30% thought it would be “unchanged” (down from 35% one year earlier) and 7% thought firms would increase their presence in the UK (compared to 8% in February 2017).

Many outfits are enlarging or starting new offices in the rest of the EU. So who’s seen to be ahead? According to the CFA Institute’s 21 March 2018 press release:

“The survey results place Frankfurt as the most likely perceived winner from Brexit, followed by Paris, Dublin, Luxembourg and Amsterdam. Paris is the biggest mover, moving up from fourth place to joint-second, and Amsterdam’s ascent into the top five edges New York into sixth place.”

The study also found that a growing number--although still a clear minority--are not sure that Britain will really quit the EU:

“15% of respondents now think it likely that Brexit will not happen--up from 5% in 2017.”

Will Goodhart, chief executive of the CFA Society UK, one of the organisation’s constituent groups, stated in the press announcement:

“The emotional temperature as revealed in the latest CFA Institute Brexit survey is falling, but the most recent findings show considerable concern for the UK’s competitiveness as a financial centre.”

The survey was fielded from 1 to 15 February 2018, the organisation said. 233 investment professionals in the UK participated, along with 238 from the EU27 and 503 from the rest of the world.