Private bankers at Credit Suisse have advised clients to consider moving assets out of the UK because of a lack of clarity around Brexit.
After Theresa May, the UK prime minister, last week delayed a vote on her deal to leave the EU, wealth managers in London contacted their top customers to warn that a prolonged period of “turmoil” had already caused a rush of clients wanting to “move assets offshore”.
Ultra-wealthy clients were advised that they might want to “accelerate” similar plans before the rescheduled vote in parliament in early January, according to people familiar with the matter.
The pitch by the private bankers follows a trend of London’s super-rich shunning UK-based assets and diversifying their portfolios outside of the country, particularly using offshore centres, amid fears of both a no-deal Brexit and the possibility of the leftwing Labour party being elected if Mrs May’s Conservative government falls.
Multimillionaires are setting up investment accounts in places such as the Channel Islands and Switzerland, or are shifting the location of UK-registered trusts holding their wealth to outside the country, the Financial Times reported in October. Some are even preparing to emigrate rather than risk becoming subject to a “wealth tax” that Labour leader Jeremy Corbyn has floated in a previous manifesto.
Other wealth managers the FT spoke to said that while they had also noted a marked uptick in concern about the political climate, it was unusual to write to clients explicitly suggesting they move their assets out of the UK.
“We certainly wouldn’t encourage clients to get their money out and run,” said one banker, who asked not to be identified speaking about a competitor. “Our role as wealth advisers is to calm some of the hysteria going on rather than add to it.”
Credit Suisse said the bank “does not currently hold a house view that clients should move assets out of the UK due to Brexit or other political developments in the UK”.
The sell-off in sterling-denominated assets has accelerated since parliament shelved its Brexit vote last Monday, sparking a sharp drop in the pound and extending the decline for UK stocks this year to 7 per cent, compared with an average of 3 per cent around the world.
More evidence is seen in the housing market, where properties in London’s most exclusive neighbourhoods are being offered at their steepest discounts since 2009 as wealthy foreign buyers avoid the market.
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