UK to Be Hit with Exodus of Financial Services Firms Post-Brexit

Financial Service Firms and Brexit
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May 9, 2017 By: , No Comments

Brexit Fears Continue as Financial Services Companies Prepare to Leave the UK

A deluge of warnings has been issued by financial services companies currently operating in the United Kingdom. They are signaling their intent to move jobs and offices from the UK to greater Europe post-Brexit. This type of banter is nothing new in the hotly contested Brexit saga. Financial services companies are particularly important to the economic well-being of the City of London.
New research tends to suggest that the sentiment among these financial companies is increasingly bearish, and they are looking to invest their capital resources in countries other than the UK. Since January 2017, there has been a 50% spike in the number of companies (222 polled) indicating their desire to relocate out of the United Kingdom. Some of the big players to push for relocation now include Deutsche Bank, Goldman Sachs, and JP Morgan Chase.


Why the sudden rush to leave the UK?

Many are likening the move to leave the UK to smart business sense. None of the financial services companies wants to be penny wise and pound foolish when it comes to the Brexit saga. There is little clarity about how the current framework between the UK and the EU will continue post-Brexit. Financial services companies are heavily reliant on European clientele and revenue streams for their profitability, and they don’t want to limit themselves to British regulation when they could have unfettered access to all European markets via European regulation.

As such, contingency plans are being drawn up. The issue is one of passporting rights between Britain and the European Union. Without an agreement of sorts in place, the disinvestment will continue. The fact of the matter is that European customers and UK customers want to know how their banks and financial institutions will cope with foreign agreements, or the lack thereof. There is no precedent for what has happened, and these companies simply don’t want to take the risk.


Financial Services Companies Finding It Difficult to Replace the City of London Elsewhere

Without Britain, there are 27 European Union countries. The big banks and financial services companies want to maintain access to the European market. Some 23% of asset managers and 27% of insurance corporations have already made clear their plans for relocation post-Brexit. 45% of investment banks will be moving operations and/or jobs from the UK to the EU. These are shocking indictments of the lack of confidence that these companies have in the politics of the region.

Recall that Prime Minister Theresa May invoked article 50 of the Lisbon Treaty in March 2017. That means that the countdown for Brexit is approximately 2 years away. On a positive note, many companies are finding it increasingly difficult to pick any destination over the UK. France has extortionary tax compliance issues and of course everything is in French. The UK is a haven for multinational companies, and this is precisely why it has been the epicentre of trade and commerce for so many decades.

Britain will retain its dominant position in financial services, owing to its highly-developed banking, insurance, and financial services sector. Other countries will certainly benefit from a Brexit, but the benefits will be spread far and wide. For example, JP Morgan Chase would be relocating its employees between Dublin, Luxembourg, and Frankfurt, while Deutsche Bank said it would relocate 9,000 employees to Frankfurt.


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Brett Chatz

About Brett Chatz

Brett Chatz is a graduate of the University of South Africa, and holds a Bachelor of Commerce degree, with Economics and Strategic management as his major subjects. Nowadays Brett contributes from his vast expertise in online trading for


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