Here are some reactions from the wealth management industry around the world in the wake of the UK vote to leave the European Union.

The momentous Brexit vote last week has created a vast amount of commentary, ranging from the gloomy, to the cautious, to occasional sounds of optimism. At an anecdotal level, it appears that the majority of private banks and wealth managers are disappointed about the result, nervous about the economic impact – at least in the short run – and concerned about whether Brexit presages an unwinding of global trade. Whether those fears are justified or not depends in large part on what the UK government does in the months and years ahead. Further uncertainty has been created as the UK prime minister, David Cameron, who has led the Conservative Party since 2005 – it was elected with a small majority just a year ago - intends to resign by autumn. Even Labour Party leader Jeremy Corbyn, who has been criticised for his lukewarm pro-EU campaign, faces some calls to stand down. 

The referendum result has sent shockwaves around the world. In the US, President Barack Obama famously urged Britons earlier this year to vote to remain in the EU and controversially warned that the UK would be pushed to the “back of the queue” in trade talks with the US. The result also made front-page news in Asia. Sterling has fallen against the dollar, the UK stock market has been hit and the gold price has surged.

Here are comments from a variety of wealth managers about the broad economic and financial effects of Brexit. If other firms not included here wish to respond, we will add reactions; you can contact the editor at tom.burroughes@wealthbriefing.com

David Riley, head of credit strategy at BlueBay Asset Management
Prior to the referendum, our assessment was that Brexit would not be a global systemic risk event. That remains our judgement given that the UK is not large enough to trigger a global recession; the financial and banking sector is much more resilient to "shocks" than it was in 2008 and policymakers have the tools and willingness to act to ensure financial stability. In our opinion, weakness in risk assets following the UK referendum vote provides an opportunity to buy assets that more than compensate for any additional risk that arises from Brexit.

Brexit will render global central banks even more sensitive to weak growth and low inflation and policy rates will likely stay lower for longer. Income-seeking investors will be forced into longer-dated bonds. The combination of rising political risk and weak growth allied to flatter "core" bond yield curves will, in our opinion, favour credit over equity and emerging market over developed market assets. After the shock and near-panic in currency markets as the reality of a UK vote to leave the European Union became apparent, global financial markets have so far responded in a relatively calm and orderly manner.

James Klempster, head of portfolio management, and Glyn Owen, investment director, Momentum Global Investment Management
The UK exit is the biggest shock to the EU project since it began in 1956 with the Treaty of Rome. The UK is the second largest economy in Europe and the most open, free market and liberal, as well as having the longest and most robust democratic traditions. Its presence in the EU will be sorely missed and its exit could trigger reappraisal of membership by other countries. It will be incumbent on the EU leadership to listen to the voices of the people and react appropriately. The risk is that the whole EU project unwinds but this is highly unlikely given the strength of the political will underlying it; even if other countries do leave it would happen only over a long period of time. The more likely outcome is that the EU will attempt to strengthen its centralisation and harmonisation, but its ability to do so will be constrained by domestic politics. This suggests that growth in Europe will remain sluggish over the longer term as much needed structural and labour market reforms will be deferred. The shock of Brexit and concerns that other members might follow could well lead to the EU Commission taking a hard line approach to the UK’s exit negotiations, potentially prolonging the uncertainty of the transition period.

Richard Jeffrey, chief investment officer, Cazenove Capital Management
The most obvious way that companies will react to uncertainty is by putting hiring on hold and by suspending capital investment decisions and programmes. At the current time, the level of job vacancies in the economy is very high (higher than at the peak of the cycle before the last recession). Were vacancies and hiring to drop back significantly, this could undermine consumer confidence and household spending. While an outright reduction in employment levels seems unlikely at the moment, it would clearly have more serious consequences were it to occur.

Noland Carter, chief investment officer at Heartwood Investment Management
Political risk premia will remain high across markets. Other than Greenland, which left the EU in 1985, there is no precedent for a country withdrawing membership. This raises a constitutional crisis for the entire EU project. The Spanish elections will test the anti-establishment mood this weekend in Europe and, further out, we have an Italian referendum in October 2016, French elections in 2017 and German elections in 2017.

Economic growth will be vulnerable in the near term for both the UK and eurozone. As evidenced by Mark Carney’s speech today, the UK government and the Bank of England will be proactive to support growth. A meaningfully weaker sterling may help to counter some of these negative forces longer term. It should be remembered that eurozone growth has been stable, but it is low at 1.7 per cent year-on-year and there is very little room for error. Central banks across the globe will be proactive and will take all necessary coordinated policy actions to stabilise financial markets. However, the risk of more policy dislocation between markets has increased and there will be increasing questions about the effectiveness of these policy responses. Overall, in coming months there will be more uncertainty for investors.

Pau Morilla-Giner, chief investment officer, London & Capital
Equity exposure in London & Capital portfolios is mainly through high quality defensive large caps, which by nature will exhibit significantly more resilience than the market as a whole. We expect a small sell-off in financial bonds, but we are still confident that the balance sheets of these institutions remain robust.

Etienne de Merlis, chief investment officer at Signia Wealth
[The] vote to leave the EU has taken financial markets by surprise. The past few days [before the vote] have seen markets rise on the back of fresh optimism that the “remain campaign” would be in the lead. Few expected a leave outcome but in the past week, we have replaced some of our equity exposure with call options, mitigating some of our downside risk further.

The focus will now shift from economic to political issues, the PM’s resignation...as well as Scottish and Irish comments highlight this. Elections will maintain the uncertainty, not only over the leadership of the country, but also on the way the negotiations to leave will be conducted. European elections being held this weekend in Spain and next year in France and Germany will add to the political instability with non-mainstream parties possibly gaining traction.

It is difficult to assess the impact this will have on the economy: some investment banks now forecast two rate cuts by the Bank of England, and while it can be debated whether a lower currency is good for the economy, there are a few things to note. Importantly central banks will be providing more liquidity to the markets, which is a good thing. However, in the current low interest rates environment, it will put additional pressure on bank stocks, which represent over 20 per cent of both the FTSE 100 and EuroSTOXX 50. With a period of uncertainty about trade, tariffs and high currency volatility, it is likely that industrial or investments projects into the UK will be delayed, thus adding pressure to growth in the UK and Europe. With all uncertainties remaining for the near future, it is likely that risk assets will remain under pressure, and safe haven assets remain an asset to be owned. Our current positioning with high levels of cash gives us the flexibility to start buying again at lower prices, but in our opinion, it is too soon to tell.

Jonathan Bell, CIO of Stanhope Capital
The politics of how this vote will be implemented will create uncertainty for many months, if not years, and is likely to keep volatility elevated. However, in many ways the vote will not be as negative on markets as implied by the predictions of calamity by many business commentators, politicians and remain campaigners. For a start central bankers are likely to respond to the vote by supporting markets; the Federal Reserve in the US is likely to delay any rise in interest rates further, whilst Central Banks in the UK, eurozone and Japan are likely to increase intervention in order to prevent a “Lehman” moment.  Longer term...[the] vote could be a key event on the road to a much needed loosening in fiscal policy in Europe as politicians work to prevent a European recession. In essence we believe that the world need not enter a self-inflicted recession on the back of this vote.

Looking at portfolio performances today, diversification across asset classes, with high cash balances and exposure to bonds and gold, has helped reduce the impact of the market falls. Our decision to maintain high exposure to non-base currencies for sterling and euro clients has enabled currency diversification to protect portfolios from part of the market fall, whilst for US dollar clients where we have a higher base currency exposure (typically of 70 per cent - 80 per cent) the impact of the stronger dollar has been detrimental in nominal terms but contained. Our slight underweight in equities has helped performance on a relative basis and may eventually help in absolute terms if markets weaken further and provide us with an opportunity to add to equities ahead of a recovery.  

Jan Straatman, global chief investment officer, and Salman Ahmed, chief investment strategist, Lombard Odier Investment Managers
Longer term, our new base case following the leave vote is ultimately a Norway-style deal for the UK. Many significant and uncertain road blocks lie ahead before such an outcome can come to fruition. First and foremost, with Scotland voting strongly in favour of remain, there will be pressure to call another referendum regarding its position within the UK. This adds another layer of uncertainty for both the EU and UK specifically. Uncertainty around the future shape of any deal would likely have to run concurrently with the strong possibility of a break-up of the EU and the UK.

Contagion to Europe is possible as conjecture increases about the domino effect and as markets question which other countries may also opt to leave the EU. With the Spanish election looming, we have to wonder if Brexit will give further impetus to the far right in Europe.

Turning to markets, we expect the volatility shock to prevail in the short term as sentiment and generalised uncertainty take over from fundamentals. We expect major central banks to step in with outright monetary easing or at the very least provide liquidity. For the ECB, extension of the current QE programme is now a given and the US will not be immune either. The potential drag on the US economy will call into question the certainty of an interest rate rise in July and even for the remainder of 2016. Using 2008 as a template, we expect usage of swap lines to ease cross-currency funding pressures as liquidity is provided to avoid any possibility of a run on the banking sector.  

Focusing on the Bank of England, the central bank is in a very tricky situation. The sharp macro imbalances facing the UK economy - the twin deficits - will continue to play out in the form of sustained pressure on sterling. Indeed, to protect the currency and the country from a balance of payment crisis, we think a sustained QE programme is unlikely to be the correct policy response. A recession is a near certainty and we expect inflation to rise sharply on the back of the weaker currency. 

More broadly, the key question facing the markets is whether any central bank actions would be enough to calm the markets. Here a lot will depend on political developments and the extent and scope of any action, which means making precise predictions at this stage is likely to be extremely difficult.

Wealth Management Association
This decision obviously has significant implications for the country and there will now be a prolonged period of uncertainty as the government responds to the public vote. 

It is important that there is a focus on long-term investment ensuring the continued success and stability of the UK’s £734 billion wealth management community for the country and its clients.

WMA will be working with our member firms to assist them to meet the challenges that will arise from the referendum result.

During the time in which our new relationship with the EU is being determined our member firms will still be subject to both UK and EU law and we will continue to work closely with both UK and EU authorities, regulators and government.

Dr Marie Owens Thomsen, chief economist at CA Indosuez Wealth Management
The process of withdrawal will be a complex negotiation requiring the involvement of all 27 remaining EU member states, the European Commission, and the European Parliament. A qualified majority is required, i.e. 20 of the 27 other members need to vote in favour, in addition to a simple majority in the EU Parliament.

The negotiations will involve all existing arrangements between the UK and the EU, as well as the status and entitlements of the approximately 2 million UK citizens living, working and travelling elsewhere in the EU. Article 50 foresees a two-year time frame to complete the withdrawal negotiations. An extension of that period could only be granted with the unanimous agreement of the remaining member states.

However, the UK’s future relationship with the EU will most likely take much longer to complete. While the UK negotiates with the EU, it will arguably be difficult to secure new trade agreements with countries outside the EU.