Moderator: Julia Taggart, CEO and Founder Innovate LSO
Rob Brugeman – Investment Manager & Divisional Director, Brewin Dolphin, London
- There is much uncertainty following the referendum. No one expected the BREXIT win to occur, especially since the Remain camp looked like it would win.
- Economic data in regards to the economic impact of BREXIT won’t be available until about August but there is concern that there will be an impact on the UK economy.
- Economically the UK is not an island. It is the second largest economy in the EU.
- Bank of England has spoken of cutting interest rates, quantitative easing and corporate tax cuts from 20% to 15%. This will impact companies looking to redomicile from the UK.
- Sterling’s value has depreciated against major currencies e.g: US dollar, euro and other major currencies.
- It has shaken confidence in the UK as a stable environment for business.
- The negative view of Europe has declined in Eurosceptic countries like Netherlands, Finland, Sweden etc in the wake of BREXIT.
- The UK’s pause before pressing the Article 50 button may be a blessing. It is not a certainty that they will go through with BREXIT.
- BREXIT vote is linked to a movement we see in the world challenging the economic status quo e.g: Front National (France), Podemos (Spain) and Trump (US)
- Political will in Europe is currently not for greater integration.
- There has been a rush of money out of UK property.
- Rise in unemployment is possible.
- What implications will BREXIT have for City of London’s prominence in clearing Euro transactions? Its pool of excellence is one of its strengths.
- FTSE 100 is up now after the drop but FTSE250 is still down.
- Opportunities: value traps (things look cheaper than they did before).
Dr. Neil Lowe – COO and Head of Financial Advisory Practice The Anchor Group, New York
- Wealth managers are paying significant attention to what is happening in global wealth market. Those who were affected by the $3 trillion-dollar drop in value of global markets within the first 48 hours post-BREXIT are considering new domiciles.
- Statements from the Bank of England show there is an extended phase of uncertainty.
- FTSE250 is underperforming.
- Big US financial houses like JPMorgan etc. are starting to have conversations re what is next. There will be implications if these large companies move their European HQs out of London.
- Businesses are unlikely to relocate in the very short-term. They are hedging their bets.
- The big issue is the tax implications. Neil believes a corporate rate of 10% is more realistic.
- France is looking to capitalise on any businesses looking to leave the City of London. He does not see France as the new financial centre to replace London in the future. Some are saying possibly Amsterdam (Netherlands).
- There has been no real post-referendum leadership from 10 Downing Street or guidance or anything to give businesses some reassurance.
- If Edinburgh (Scotland) plays its cards right, it could be a new hub. It is easier from businesses to relocate to Edinburgh from London than say France or Amsterdam.
- Opportunities: Caribbean OFCs could benefit from BREXIT. Neil mentioned Barbados which is welcoming and has a good record of managing private wealth. He also mentioned that Jamaica, Bermuda and Cayman also have the infrastructure to do the same.
- Our wealth managers and experts need to get out there and market our product.
- We need to look at new opportunities.
- He believes BREXIT will lead to diversification from a corporate investment and infrastructure perspective. Caribbean OFCs present great opportunities for wealth managers. He believes there will be movement towards alternative centres and London could no longer be the main hub.
Richard Hay, Partner Stikeman Elliot, London
- British Offshore Territories (BOTs) will not be directly impacted by BREXIT because their access to the EU was negotiated bilaterally.
- The appeal of the BOTs is their reliance on British courts, lawyers etc.
- It is unlikely that any new British PM will have the same enthusiasm for tax transparency as Cameron did.
- BOTs may benefit from BREXIT because they may have better access to the EU than the UK does but they may also be used as pawns in the withdrawal negotiations. It is unlikely the British will support their BOTs.
- Two things to keep watch on: blacklists (2 stage process) and the new EU committee to investigate members/dependencies re compliance in light of the Panama Papers scandal.
- OFCS must push back against the narrative that they are a giant criminal enterprise and highlight the importance of the sector for ordinary individuals e.g: pensions, importance to the global supply chain, export jobs etc
- OFC industry must make the case that they make an important contribution to the global economy.
Françoise Hendy – Founder & Managing Director FranHendy Attorneys (Global presence)
- Four key things must be borne in mind. Managing and capitalising on BREXIT must be industry-led and government-supported.
- We need to map investment flows strategically, including targeting UK businesses looking at Canada.
- The private sector needs to be more visible in the post BREXIT tax reform agenda.
- The EU is looking to apply regional tax policy to the international environment. Its policies are OECD-plus. In this respect the OECD is more an ally now.
- The loss of the UK’s voice means the private sector must engage with the EU Commission/Council. We need to show we have substance. We cannot rely on Government alone.
- The private sector needs to go to Brussels and interface directly.
- SEP may not be as marketable as we would like it to be. In marketing the SEP, we should focus not only on persons making a lifestyle investment but also mobile investors.
- In the wealth management space, there is a demographic looking to retire in Spain. We should target them to come to the Caribbean instead.
- BREXIT is an important opportunity to revisit our business model.
- Diplomacy is not just the purview of governments. The private sector is also needed.