Finance Sector Staff Relocations Gather Steam in Brexit Fallout

The drumbeat of financial firms looking for an exit from the U.K. in advance of Brexit is getting louder. Ernst and Young noted this week that firms operating in investment banking and insurance are disclosing plans move from the U.K.

Research from E&Y, said Law360, shows that the recent announcements comprise a “small but growing share” of the big hitters in those industries.  The now encompasses 25 percent of more than 220 firms that are being tracked by E&Y – and that amount is up 50 percent across the past four months.  Recent entrants into the Brexit exit pantheon include American International Group and QBE Insurance Group.

The site Law360 quoted Omar Ali, the E&Y U.K. financial services leader as stating that “the number of financial institutions who are publicly committing to concrete action in response to Brexit has increased, but it’s still a minority and is driven by the tight timetable rather than politics. The more complex the organization, the longer it is going to take to create workable contingency options, and so investment banks in particular are putting their plans on record.”  As many as 21 of the 47 investment banks that it tracks have stated intention to move at least part of its staff away from the U.K.

Focusing a bit more granularly on the Reuters reports that the biggest banks in the City are seeking to relocate about 9,000 staffers away from London and to the Continent over the next two years.   The newswire stated that in an interview with Goldman Sachs’ CEO Lloyd Blankfein, the executive stated that the capital’s growth as a financial center might be stalled by Brexit’s impact.

And to date, stated Reuters, 13 major banks have fired at least initial shots across the relocation bow, seeking to boost presence across the Continent to ensure that they have unfettered access to the single market extant away from the U.K. post Brexit.  As of now the relocations encompass only two percent of staffing levels.  Yet the tax revenues enjoyed by Britain could see an outsized impact, as the taxpayers that would leave are disproportionately wealthy.  Companies operating within Finance have until July 14th to lay out their plans, as guided by the Bank of England.