The situation in relation to the UK’s planned exit from the EUis changing daily at this point and the terms on which the UK will leave next March, assuming they do, are impossible to determine. Harvest has been monitoring developments as closely as possible in an attempt to ascertain what potential risks our clients are possibly exposed to in the context of business they carryout with Harvest, particularly in the event of a no-deal Brexit. The Central Bank of Ireland have also requested that all financial advisers communicate with their clients in relation to the topic.
There have already been obvious effects on the volatility of Sterling in the run-up to Brexit and these may well be considerably exacerbated in the event that the UK leaves without a deal. Clients who hold assets denominated in Sterling should be aware that the euro value of those assets could be unpredictable in the wake of a hard Brexit. Furthermore, realising the value of those assets may not be a straightforward matter in the immediate aftermath.
In addition, a hard Brexit may cause issues around the free movement of goods and services between Ireland and the UK and for the vast majority of our clients restrictions in these areas will be irrelevant in the context of their pensions and investment business. However, there is also the outside possibility of restrictions being applied in relation to the transfer of funds between the two jurisdictions. Should such restrictions be applied, they are likely to be of a very temporary nature because of the potentially dire economic consequences even over a short period. An associated development might be a curtailment on the ability to place trades with UK-based stockbrokers or platforms. Finally, for the small number of our clients who are UK resident there may well be issues around the provision of services from Ireland.
However, in order to minimise the risk of any kind of complications arising around capital movements, Harvest is working hard to ensure that any investment funds held by Harvest clients are domiciled outside of the UK in advance of next March. In addition, for clients who hold assets on the UK based Stocktrade platform we will be strongly encouraging them to switch those assets to the Pershing platform which is international rather than based in the UK. There will be little or no cost in making this switch but we believe the rationale for doing so is twofold (i) it avoids any fund transfer complications post Brexit (ii) as Pershing is ultimately owned by a triple A rated financial institution (BNY Mellon) the security aspect for clients compared with Stocktrade is considerably stronger.
We plan to communicate with all affected clients between now and March in relation to any changes which might be advisable pre-Brexit. In the meantime,if you have any queries please contact your Client Adviser on 01 2375500.