Testifying before the committee’s inquiry into the economic and financial costs and benefits of UK membership of the EU alongside representatives from both the Wealth Management Association and the Alternative Investment Management Association, the Investment Association’s interim CEO said that of the roughly £5.5trn of assets managed by the UK industry, around £1.2trn is on behalf of European clients.
“The UK asset management industry has specifically benefited from the ability to passport products into the EU,” Sears explained.
While he was unable to commit to specifics in terms of how the industry would be impacted, given that the exact question to be posed in the referendum on the UK’s membership of the EU is as yet unknown, he was clear that in the event of Brexit: “There would be massive disruption to the way that we currently organise our businesses.”
“If we leave Europe, UCITS funds are no longer UCITS funds and it isn’t automatic our right to provide services into the European Union,” Sears added.
“The benefits continue to outweigh the burdens, especially the ability to passport funds,” Sears said in answer to a line of questioning associated with the costs of regulation, especially in relation to membership, before adding that, where there are burdens, the EU is reviewing them.
When pressed, however, Sears did admit that were Brexit to occur, the industry would reluctantly adapt to the new situation.
