Brexit - financial services shift 7,500 jobs

More than 7,500 financial services jobs have relocated from the UK to hubs in the European Union since the Brexit referendum four years ago, according to the latest survey by EY.

David Sapsted

2 October 2020

EY’s Financial Services Brexit Tracker recorded announcements of more than 400 jobs being moved from London to the EU in the three months to the end of September.Since the referendum, 88 of the 222 financial services firms monitored by EY - including banks, brokerages, wealth and asset managers, insurers and FinTechs - have confirmed moves of operations or staff or both to at least one location in Europe.Dublin remains the most popular destination for staff relocations and new European hubs with 34 firms having confirmed or are considering relocations of operations and/or staff there. Luxembourg has emerged as the second most popular destination after attracting 26 companies. Frankfurt has managed to entice 23 firms, 19 of which are universal banks, investment banks or brokerages. Meanwhile, 20 companies have said they are considering or have confirmed relocating operations and/or staff to Paris, 14 of which are universal banks, investment banks or brokerages.Omar Ali, UK financial services managing partner at EY, said: “Many financial services firms had implemented the bulk of their relocation plans before the start of the year, and we saw very little movement in the first half of 2020."But as we fast approach the end of the transition period, we are seeing some firms act on the final phases of their Brexit planning, including relocations. This is despite the pandemic and consequent restrictions to the movement of people, which is clearly making it harder to relocate people and adds complexity for those who were looking to commute to EU locations."

But Mr Ali said that with the prospects of a Brexit trade deal still hanging in the balance, many firms remained in a "wait-and-see mode"."The pre-trade agreement, set to be finalised at the end of October, means we could yet see a flurry of further staff and operational announcements in the weeks that follow," he added."But the clock is running down and, with the possibility of a second Covid-19 spike threatening cross-border movement in the final three months of the transition period, firms must now ensure that as a minimum they will be operational and can serve clients on January 1 2021.“As we approach the final deadline, the lack of clarity around future trading agreements is fuelling ongoing debate within the financial services sector."Mr Ali said the time had now passed for companies to rely on short-term equivalence assessments that would align to EU rules, and that the sector’s attention was increasingly focused on the longer-term outlook."Firms are looking at new standards that will support the UK industry beyond the initial post-Brexit phase, ensuring it remains a leading global financial centre,” he said.The tracker recorded that 24 of the largest financial services firms - 10 banks, nine insurance providers and five wealth and asset managers - have so far announced intentions to transfer assets out of the UK to Europe ahead of Brexit."Not all firms have publicly declared the value of the assets that could be transferred, but of those that have, EY’s Financial Services Brexit Tracker analysis suggests a conservative estimate of £1.2 trillion, up from £1 trillion at the end of 2019."