British PM Theresa May has triggered Article 50 of the Lisbon Treaty, commencing the two-year process of the country's exit from the EU.
WealthBriefing rounds up views from wealth mangers.
UBS Wealth Management said: “Today won’t be remembered as a pivotal moment in the way June 24th will. Volatility in the equity market will be limited and temporary, with economic and earnings growth the key driver of performance over the long term.
“Investors should respond to the uncertainty of the negotiating period with caution not chaos. We expect the pound to recover towards its long-term fair value if the negotiations proceed collaboratively and constructively.
“If the mantra ‘no deal is better than a bad deal’ is followed, it is entirely feasible we could see the hardest of hard Brexits. But it is too early to jump to this conclusion. Posturing – on both sides – is always a feature of any tough negotiations.”
Ed Molyneux, CEO and co-founder of FreeAgent, who provide cloud accounting software to freelancers, micro-businesses and their accountants said: “The triggering of Article 50 is a decision that the UK’s micro-business owners will have great concerns about, so I hope that the government will take their views into consideration as it negotiates our exit from the EU.
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“There are currently have more than five million micro-businesses in the UK, comprising around 95% of the country’s total number of businesses. But despite forming the backbone of our economy, they are rarely taken into consideration when it comes to big changes in legislation or policy – and many of them are disheartened by the looming prospect of a hard Brexit.
“We recently carried out a survey of micro-business owners and found that the overwhelming majority were not happy with the result of the referendum, while nearly three quarters of them thought that Brexit would have a negative impact on the UK. In addition, 84% of respondents said they didn’t think they had been given enough information about the impact that Brexit would have on their businesses.
“It’s therefore imperative that the government properly engages with the micro-business sector during its negotiations with the EU and ensure that their concerns are listened to in the years ahead. We need to consider the impact that Brexit will have upon every business in the UK – not just larger enterprises and corporations – so we can build a post-Brexit economy where everyone is given the opportunity to flourish and grow.”
Reacting to the triggering of Article 50, Michael Metcalfe, global head of macro strategy for State Street Global Markets said: “The triggering of Article 50 was well anticipated, but the fact negotiations are now live means financial markets may become more vulnerable to commentary from European and/or UK officials as to how well, or poorly, the initial discussions are going. Headline risk is back, if it ever really went away.”
Bill Street, head of investments for EMEA at State Street Global Advisors commented: “Our expectation is that the trigger itself is a non-event and has been largely priced into the market. In the short-term we may even see a bounce in sterling as investors close out their short positions. The impossibility of mapping out future negotiations prevents any proper pricing today, but the process over the next two years will undoubtedly spark volatility and larger moves in price levels.”
PwC head of financial services Andrew Kail said: "Now that the starting gun has been fired on Article 50, the UK’s financial industry will have to start adjusting to life outside formal membership of the European Union. It remains critically important that access to markets and customers is maintained both here and overseas.
"Inevitably the full transition to a new regime will take many financial services companies longer than two years, not least because of existing and emerging regulations. The scale and pace of change is unprecedented. Some firms have estimated the changes would normally require between three to five years.
PwC UK asset and wealth management leader Mark Pugh said: "The asset management sector is strong, innovative and resilient. The diversity of these global organisations and their contribution to the UK makes the continued success of the sector vitally important.
"The triggering of Article 50 gives asset managers a degree of long-awaited certainty and a set timeline to work towards. Firms must now rise to the challenge and continue to serve their customers with the passion and skill that has made the UK a leading destination for the global asset management industry.
“The time for indecision is over – firms must now firm up their plans for various Brexit scenarios, ensuring their customers remain at the centre of everything they do. It’s important that businesses continue to press ahead with preparations to comply with any EU legislation due to be implemented in the next two years, such as MiFID II.
"We will work with our clients to help ensure that the UK’s transition out of the EU leaves the asset management industry in a strong and enduring position, whatever the negotiations bring."