Asset managers raise concerns over future of UK Plc

26 July, 2010

Asset managers running over £2trn of investments in the UK have expressed concerns over the future of the UK as a place to do business, according to the results of the Investment Management Association’s Annual Asset Management survey.

The survey, now in its eighth year, found managers were concerned about uncertainty over government policy on taxation and immigration, which could force companies to relocate overseas and jeopardise future expansion plans.

However, respondents also cited the UK’s ‘natural advantages’ – including its time-zone and language, ability to attract talent and the current relatively benign regulatory regime – as reasons to continue to do business in the UK, and added the Coalition Government could do more to address concerns about the UK’s competitiveness.

Richard Saunders, chief executive of the IMA said asset managers were “not about to up sticks” and still rated the UK’s investment infrastructure and reputation as “a premier league financial services centre”.

“But there is certainly more restiveness about the UK this year than last, with particular unease around the impact of tax and immigration policy. In our view, this presents the Coalition Government with a strong opportunity to provide certainty to an industry managing assets equivalent to 240% of UK GDP,” he added.

The survey also found that for the first time, more than half of assets under management were managed by firms outside of the traditional ranks of investment banks, retail banks or insurance companies, with increasing number of independent businesses.

Saunders added: “Our survey paints a picture of an assertive, innovative and independent industry, now overtly global in its outlook and ambitions. Its distinctive business model, with its clear agency relationship with clients, has stood it in good stead during the crisis. And the future – whilst not without its challenges – looks positive as the industry’s role and reputation continues to grow.”