There are three crucial questions that will determine the effect of Brexit on advisers.
Firstly, to what extent will the UK seek to apply the single market? Our surveys have found one in three advisers have at least one client outside the UK in the EU.
In the event advisers must have a local licence and abide by local rules I expect many would struggle.
And while many currently advise their clients only when they are back in the UK, this could also become cumbersome in future.
If we do not seek to apply single market rules, to what extent will the FCA reform UK regulation? Under the FCA’s “sustainable regulation” initiative, it is committed to reviewing whether any of its rules are outdated and, if so, to removing or redrafting them.
A policy of “copy out” from EU directives leaves much of the Handbook vague and unclear: the underlying directives were never supposed to be actual legislation.
It was the responsibility of member states to clarify and articulate the intention in a way that meets their needs – an opportunity the UK largely chose to ignore for fear of being accused of gold plating. So there is ample scope for better regulation even without deregulation.
Finally, will the Government direct the FCA to develop a new style of financial services regulation? The Government will be in no great rush to redesign the regulatory framework with all the other things on its plate right now but the medium-term is more open.
We are looking to submit areas of difficulty and uncertainty to be examined as part of the sustainable regulation agenda but it is also time to be thinking more radically about further off when there may be greater scope to refashion a future regulatory framework.
Chris Hannant is director general at Apfa