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CFA Institute members split on whether U.K. will reach comprehensive trade deal

Half of investment professionals are sanguine about the chances of the U.K. reaching a trade deal over its exit from the European Union, but remain concerned over the impact on U.K. money managers.

The CFA Institute found in its 2018 Brexit member survey that 49% of money management professionals across the globe expect the current negotiations between the U.K. and EU to result in either a comprehensive trade deal covering both goods and services, or goods only. Non-EU respondents were most optimistic, with 52% in China expecting a deal. In the U.K., however, only 17% of respondents expect a comprehensive trade deal.

More respondents based in Switzerland and Germany are anticipating a U.K. "crash-out" exit — with no trade deal — from the union, at 35% and 30%, respectively.

Regarding money management talent, 64% of U.K. respondents think Brexit will negatively impact their ability to attract the best recruits.

Further, should Brexit have an impact on the delegation of money management activities such as portfolio management, 52% of China-based respondents and 49% of U.K. respondents said restrictions on these practices would be negative for investor outcomes.

As for the rest of Europe, Frankfurt was seen as the most likely winner from Brexit, followed by Paris, Dublin, Luxembourg and Amsterdam. Further, 34% of respondents think the EU is likely to strengthen, compared with 13% in the CFA's 2017 survey; and 30% expect more countries to exit the EU to follow the U.K.'s departure, down from 59% in last year's survey.

"What is powerful about this research is the body of opinion it provides from a large number of investment management professionals around the world, many of whom have no emotional investment in Brexit," said Gary Baker, managing director of Europe, the Middle East and Africa and industry and policy research, at the CFA Institute, in a statement accompanying the survey results. "While we see some signs of optimism, views of CFA Institute members vary between the markets, and much uncertainty remains over the likely outcome of the Brexit negotiations."

The survey took place between Feb. 1-15, and was completed by 974 investment professionals. That was split 24% U.K., 24% EU ex-U.K. and 52% from the rest of the world.