Referendum Result

EFPG’s message is to “Keep Calm”

There are three main options open to the UK Government following yesterday’s vote:

  • To withdraw according to Article 50 of the Lisbon treaty, meaning a two year (possibly longer) process. This process may be negotiated or not.
  • To negotiate with the EU and possibly hold another referendum to gain public consensus for the UK to remain within the EU.
  • To unilaterally withdraw outside the process as defined in the Treaty of Lisbon.

EFPG cannot predict which approach the UK will take but does not consider that a “messy divorce” would be in the best interests of either the UK or the EU.

How could this affect you?

Life Insurance.

All of our major providers are UK or non-EU based. We do not envisage any disruption of your cover or terms of that cover.

Investments.

EFPG considers that there will be a considerable amount of market instability over the next few days, weeks and possibly months or until a framework is set out by the UK government and the Bank of England. EFPG’s view is that in the long-term that your investments will not be affected negatively by yesterday’s referendum result. The worst time to sell investments is when markets are low as when you re-enter the market you will undoubtedly buy in at a higher price.

Currency.

EFPG considers that the market is going to be quite volatile in the short-term. The markets will stabilise but at what level we cannot predict.

Local Pensions.

EFPG generally provides pensions with two underlying investment vehicles: a life insurance policy or an investment platform. The life insurance policies are generally based in the Isle of Man or the Channel islands and are therefore unaffected by our EU status. Our platform provider is based in the UK although it does use some services of a platform based in an EU jurisdiction. We do not consider that an EU exit would affect this relationship but we have other providers based in the UK, Channel Islands and the Isle of Man to which we can transfer assets within a relatively short space of time with minimal disruption should we find that it is in our clients’ best interests.

Savings Plans.

Very similar to the local pensions as the underlying investment vehicles are the same.

International Pensions (QROPS & QNUPS).

EFPG considers it highly unlikely that HMRC will cease to recognise pensions that are already established if the UK were to withdraw from the EU. Both QROPS and QNUPS were launched due to EU human rights legislation with regards to freedom of capital movement. Therefore, it is feasible that if the UK were to withdraw from the EU that no further pensions of this type would be recognised by HMRC in the future.

Going Forward

EFPG will receive updates from and communicate with our various service providers and business partners to ensure that you, our clients, will continue to receive the best advice and best possible service.

Please feel free to contact us to answer any queries that you might have or for further information.