Editor’s note: Brexit politics have moved on. Advisers haven’t

By Justin Cash

Jan 24, 2019
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Even for someone who lives and breathes the news, I must admit I’m struggling to keep up with the twists and turns of Brexit’s passage through Westminster. 

Some are certainly taking steps to protect very specific types of client, such as expats, where we are far clearer regarding the potential pitfalls.

Although the government has guaranteed state pensions will be paid out to pensioners living overseas, its “no deal” paper did warn that private pensions from UK insurance companies paying, say, an annuity, to an expat in the European Union could be at risk.

It’s up to bodies like the Association of British Insurers to fight the lobbying battle.

For now, it’s advisers’ job to make suitable financial plans using the best of their knowledge, not to guess which way the ever-changing mood music might go.

Frankly, it would have been much easier not to have taken on the topic for this week’s cover story, given everything might have changed between the time I write these words and when they actually land on your desk.

It’s also tough to keep tabs on exactly which fund managers are making what preparations.

There was a further dribble of managers establishing Luxembourg-based vehicles this week as Theresa May hopped off to Europe to work on Plan B.

When it comes to financial planning, understanding complexity and being prepared to deal with the unexpected comes with the territory.

In fact, it’s the very reason why protection products exist. But you can’t purchase Brexit protection, much as most of us would love the opportunity to buy a policy to provide for our families in the event we die of boredom.

It appears there is a consensus that, just like May’s parliamentary arithmetic, you’ve got as much chance of getting it badly wrong as you do right.

Brexit isn’t an event with a measurable and tangible financial consequence for any individual client, which you could just plug into a cashflow modelling scenario.

If you’re exposed to a UK equity fund, say, it’s impossible to quantify that risk. It’s up to the fund managers in most cases, not the advisers, to make their own stab
at which stocks within a volatile UK market are the best bets, and they could as easily see a dividend as a downturn based on that selection.

But while financial advisers may be just as bored as the rest of us at this stage, that doesn’t mean they are pretending Brexit isn’t happening.

Some are certainly taking steps to protect very specific types of client, such as expats, where we are far clearer regarding the potential pitfalls.

Although the government has guaranteed state pensions will be paid out to pensioners living overseas, its “no deal” paper did warn that private pensions from UK insurance companies paying, say, an annuity, to an expat in the European Union could be at risk.

It’s up to bodies like the Association of British Insurers to fight the lobbying battle.

For now, it’s advisers’ job to make suitable financial plans using the best of their knowledge, not to guess which way the ever-changing mood music might go.

Money Marketing

Money Marketing, Centaur

The leading magazine and website for IFAs and professional financial advisers. Pensions, investment, mortgages, protection, platforms and regulation news.

1 Comments

John 3 months ago