Today, results will begin to come through on the UK referendum result on the EU. Here are comments and some survey evidence on what investors and wealth managers think.

By the time you read these words the result of yesterday’s referendum on whether the UK should remain in or leave the European Union may be known. As of the time of writing, opinion polls show the result will be close. The impact of the world’s fifth-largest economy leaving the 28-country bloc, of which it has been a member since 1973, could be large, although there is enormous uncertainty around the impact, certainly in the medium term. (One should also recognise that even supposedly impartial economists have their unconscious biases.) In the wealth management sector, the effects will be felt far beyond issues such as the movement in equities or bonds, the level of sterling and property prices.

There are issues to consider such as the impact on high net worth visa systems, non-domiciled residents, the UK’s relations with IFCs such as Jersey, the British Virgin Islands and Gibraltar. Some wealth management firms able to passport financial services to the rest of the EU’s Single Market may face tricky decisions on what to do if the vote is to leave. On the other side, if the UK votes to remain, it is not entirely clear whether the EU can continue as it is, or whether the referendum will encourage other changes and reforms. That Europe needs to reform and address its lamentable recent growth record is hardly controversial. The eurozone remains fragile; France’s economy is sluggish and the problems of southern Europe, most obviously Greece, have not gone away. 

The rest of the world, judging by newspaper coverage in Singapore and Hong Kong, for example, is fascinated by how one of the world’s oldest parliamentary democracies is wrestling with its membership of a transnational entity forged in the aftermath of World War 2. What goes on in London, one of the great financial capitals of the world, matters to people far afield.

As the result clarifies, this publication will continue to track how these developments affect wealth management. We value readers' comments. Do please contact the editor at tom.burroughes@wealthbriefing.com if you want to comment.

Here are some comments on the vote:

plan.co.uk, the UK-based online investment platform
Analysis by the company shows that UK investors have reduced their investment in UK and European equities and markedly increased their holdings in cash in the run-up to the EU referendum. The level of new investments in UK funds on the rplan.co.uk platform fell 63 per cent over the last month and 46 per cent over the last three months versus the same periods last year. Levels are down 34 per cent in the last six months versus the same period last year.

The amounts invested in European funds fell 41 per cent, 22 per cent and 35 per cent in the last one, three and six months respectively versus the same periods last year. However, the levels of new investments into cash skyrocketed 408 per cent in the last three months and surged by 411 per cent in the last six months versus the same periods last year.

Alex Ruffel, Irwin Mitchell Private Wealth
There are more than 1 million British people living in EU countries with nearly 500,000 in Spain and France alone. The legal status of expatriates is one issue that will need to be settled quickly. Will they be allowed to carry on living there or have to apply for residency? These are questions that need quick answers.

Sarah Phillips, partner at Irwin Mitchell Private Wealth
Brexit will potentially have a huge impact on the people who work in the UK’s financial services industries. Many banks, insurers and fund managers who have large businesses in continental Europe could consider relocating to Paris or Frankfurt and senior staff will either lose their roles or have to move to another country.  Some global investment banks, such as JP Morgan, have said that Brexit would lead to a significant loss of jobs in the UK.

Garrath Reayer, partner at Irwin Mitchell Private Wealth
As with all these issues it is really difficult to say with any degree of certainty what will happen. Brexit could result in some very wealthy individuals and families leaving London but for others, being in the UK has nothing to do with Europe at all. Inevitably, Brexit and the two year period subsequent to an out vote when the UK Government will have to negotiate the UK’s exit will result in uncertainty. It is likely that short term political and economic uncertainty will have an adverse effect on the price of London properties (and certainly prime Central London properties) but in reality it is likely only to be a small correction. Whether that will be offset by a fall in the price of sterling against other major currencies and an even longer period of low interest rates is another question. 

Dr Marie Owens Thomsen, Indosuez Wealth Management
As the opinion polls have again reverted to showing a majority for the Remain camp, the pound sterling has appreciated to the highest rate in five months. That makes the currency even more vulnerable should the UK instead vote for the exit. In such a disaster scenario, the [pound sterling] would be the biggest loser, but on impact all emerging market currencies would likely to suffer in a major risk-off move. The most potentially vulnerable currencies are those which countries run current account deficits, and also those with political challenges of their own. This would include India, Indonesia, Turkey, and South Africa, and Brazil - all deficit countries, as well as the Philippines in the current political context. 

Thailand runs a 10 per cent of GDP current account surplus which ought to limit the pressure on the baht, and China and Hong Kong's surpluses are both around 3 per cent of GDP, also offering a degree of protection. Safe haven currencies include the Japanese yen, the Swiss franc, and the Singapore dollar, but also the Antipodean and Scandinavian currencies. The Mexican peso has become synonymous with "hedge against everything", and short positions have been building up ahead of the UK vote as well as in anticipation of the US presidential elections where Mexico is seen to suffer most should Donald Trump capture the White House. 

The euro too would suffer in case of a leave vote but one should not forget that the eurozone is ultra-competitive, running a current account surplus of 3 per cent of GDP, and the European Union actually has the world's largest current account surplus in US dollar terms, ahead of that of China.