Over the last few years, many supporters of Brexit have proudly shouted that leaving the European Union would allow the UK to get closer to markets further afield.
The loss of passporting rights into the EU has set the UK financial services sector back but a newly introduced scheme could allow future collaboration with wealth industries in countries like Singapore, Australia and the US.
The pilot grant funding programme will provide targeted support to UK professional and business services regulators that are negotiating recognition arrangements by providing funding for additional technical expertise.
The UK government said it “will allow UK businesses and professionals to seize opportunities overseas and boost the appeal of UK qualifications”.
International Adviser has spoken to the Personal Finance Society (PFS), the Chartered Institute for Securities & Investment (CISI) and Partners Wealth Management to discuss if the scheme can bring the UK closer to the US wealth management market.
The scheme has many possibilities and could be the answer to bolster relationships with financial services sectors across the world – like the US.
Shayne Halfpenny-Ray, public affairs manager of the PFS, said: “This funding opens up the capacity for regulators to carry out much needed engagement with their counterparts in other regulated markets around the world.
“Much of this has been spurred on by the UK’s exit from the European Union, and the focus on what this means for those who hold professional qualifications in these territories now we are a third-party country. While these measures aren’t explicitly for any one state, they could prove useful to support work, such as what we as a professional body carry out, in supporting professionals in markets around the world.”
Kevin Moore, CISI global business development director, said that it had surveyed its adviser and wealth manager members about the potential of the scheme expanding relations with the US.
Some of the responses were:
- “The US is very well provided for in terms of financial services, and UK financial institutions working from the UK could find it very difficult to service US investors”;
- “It may be easier with UK institutions based in the US (jobs based there) but even that is not straightforward”; and
- “We should try because it may open up opportunities”.
The scheme has the possibility for global clients or expats to be more easily served and may mean more cross-border services being offered.
The CISI said that one member believes “there are other jurisdictions, particularly Europe, where there may be more obvious benefits in terms of serving expat clients in countries like France and Spain”.
Halfpenny-Ray added: “This could potentially help support expats in countries around the world, depending on the demand for a mutual recognition system for professional qualifications.”
Nathan Prior, partner and head of PWM international, said: “I do not believe that qualifications are the only barrier to US businesses advising UK residents or vice versa, as a qualified and experienced adviser could easily meet the basic qualification requirements in either jurisdiction.
“The issue is the need to be regulated in both jurisdictions, which can be very burdensome and costly.
“Ultimately, if your focus is to advise US citizens in the UK, it would be more efficient to establish your business in the UK and deal with the Financial Conduct Authority (FCA), rather than base yourself in the USA and have to deal with both the Securities and Exchange Commission (SEC) and the FCA.”
There is no guarantee that the scheme could lead to future connections with the US.
So, what needs to happen for the financial services industries on both sides of the Atlantic to be united.
PFS’ Halfpenny-Ray added: “Much may depend on further negotiations, including the potential for a UK/US free trade agreement, as professional qualifications and skills often feature in these negotiations.
“On top of these measures, people across financial services will keep a close eye on future negotiations between the UK and the US on a free trade agreement. Especially the opportunities this could present for UK firms and our united profession.”