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Concerns over hard Brexit growing for U.K. CFA members, but majority still expect soft exit

Investment professionals increasingly expect a so-called hard Brexit when the time comes for the U.K. to leave the European Union, a survey of CFA Society of the U.K. members shows.

A higher proportion of respondents to the CFA's survey expect a hard Brexit — where the U.K. would effectively cut all ties with the EU and lose access to the single market and customs union — at 22.5%, vs. 17% a year ago. Those expecting a soft Brexit — where the U.K. remains close to the EU and existing arrangements — accounted for 58% of respondents, vs. 67% a year ago. The remainder had no view.

U.K.-based investment professionals are also increasingly expecting to leave the country, with a rise to 11% from 9% a year ago. The CFA said in a news release accompanying its survey results that this is based on a large increase in the number of British passport-holding investment professionals who now expect to leave, at 9% up from 5%.

The number of EU passport-holding investment professionals expecting to stay in the U.K., however, has increased to 49% from 43% last year, but there was also a slight increase in the proportion expecting to leave the U.K., up to 17% from 16%.

Job security has also changed. Of U.K.-based respondents, 54% said they feel their role is safe, vs. 60% last year. The proportion of EU passport-holding respondents who feel their job is secure in light of Brexit fell to 39% from 43% last year.

There are also concerns among respondents regarding London's future competitiveness, with 77% viewing Brexit as deteriorating the competitiveness of the U.K. as a financial center. Just 6.5% think competitiveness has improved; 11% think it has not changed; and the remainder don't know.

"There's good and bad news in this year's survey," Will Goodhart, CEO of CFA U.K., said in the release. "The good news is that more investment professionals, especially European investment professionals, expect to continue working in the U.K. post-Brexit. Yet more of those who were not sure about their intentions last year appear to be deciding to leave. Our survey did not ask them directly for their reasons, but the survey shows an increase in the number of respondents expecting a hard Brexit. Correlation is not causation, but it would be surprising if there was no relationship between these two results."

The survey was conducted between Aug. 20 and Sept. 4, among 829 respondents. Of respondents, 60% held a U.K. passport, 28.5% held an EU passport and the remainder held another international passport.