UK financial services firms are continuing to move jobs and assets to the European Union but at a slower rate, the EY Financial Services Brexit Tracker shows.
According to the latest data, 95 of the 222 financial services firms monitored by the tracker (43%) have publicly stated they have moved or plan to move some UK operations and/or staff from the UK to Europe. This takes the total number of job relocations since the EU referendum to almost 7,600, up from 7,500 in October 2020.
An estimated total of almost £1.3trn of UK assets will be transferred to the EU by financial services firms as a result of Brexit.
“After the major hurdle of standing up new EU hubs, the days of significant swathes of asset and job relocation announcements appear to have passed and will likely be replaced by the slower yet ongoing movement of people and assets to Europe for compliance purposes,” said Omar Ali, EMEIA Financial Services managing partner for client services at EY.
Dublin and Luxembourg remain the most popular EU destinations for staff relocations, new European hubs or office relocations.
Meanwhile, over a quarter (26% and 57 out of 222) of firms have publicly stated that Brexit is impacting or will negatively impact their business, up from 49 firms in January 2020.
With the negative financial impact of leaving the EU still being felt in the financial services sector, firms have called on the government to ensure the UK maintains a cooperative trading relationship with the bloc.
Since late December 2020, four global wealth and asset managers with combined assets under management of over $10trn have called for greater clarification over the UK’s future regulatory regime, arguing for greater alignment rather than divergence from Europe, focused on establishing a flexible, cooperative relationship with the EU.
“Specific policy work to align the UK and its closest trading partner remains crucial and will be mutually beneficial – uncertainty has been a thorn in the sector’s side for nearly five years,” Ali added.