A pick-up in optimism after the European Referendum has not extended to the asset management sector, with nearly three quarters of wealth managers apprehensive about the future.
72 percent of respondents to this quarter’s CBI/PwC financial services survey said they are more worried about their overall business situation than they were three months ago, despite a number of positive figures and surveys since the immediate downturn after the Brexit result.
52 percent of asset and wealth managers see a risk of changes being made to UK financial regulation post-Brexit, with 40 percent seeing Brexit as an opportunity to accelerate transformational change. Just 39 percent see Brexit as an opportunity to stimulate innovation and new entrants to the market.
Mark Pugh, UK asset and wealth management leader at PwC, commented:
“The referendum result undoubtedly shook the investment markets but there has been a turnaround since then and firms are beginning to return to normal and view the UK’s decision to leave the EU as another important consideration in a long list of challenges.”
“As the industry-wide pressure to cut costs and streamline operations continues to build momentum, asset and wealth managers are looking to technology to help differentiate, speed-up and future-proof their business.”
Senior figures from across Europe have warned the UK not to be complacent over the impact of a European exit, arguing that the real effects will not be felt until Article 50 is triggered and negotiations begin.
Similarly, the initial market volatility is not the only challenge facing the asset and wealth management sector in the wake of the result; compliance with regulation remains a key consideration for all players in the market. Regulations may well be subject to change as negotiations begin.
The survey also showed a slowing the rate of hiring in the asset management sector, as companies prepare to absorb future shocks and reflecting an ongoing pressure on margins.