Asset managers in the UK have started to prioritise operational risk management ahead of Brexit, according to a survey by KPMG. The Brexit risk management tests are designed to help firms get a more accurate sense of their capital requirements.

The KPMG study found 44% of firms stress-testing their business against Brexit last year. This year, the figure has reached 100%.

Moreover, 40% of asset managers said that they have, or plan to, implement relocation strategies in response to Brexit.

The median capital increase imposed by the Financial Conduct Authority was 82% in the previous year. Through 2018, this figure dropped to 39%.

“Whilst most firms are using models to get a more accurate sense of their capital requirements, a fifth of those who got it wrong, got it very wrong with the FCA asking them to more than double their capital,” the study said.

Among firms visited by the FCA, 56% were told to implement formal risk mitigation programme.

KPMG head of financial services Jon Holt said: “The asset management sector is responding to the fact that risk awareness and management has to be more than a tick-box exercise. However there is a way to go in a number of areas, for example, 17% of firms do not have a liquidity management framework even though it has long been a regulatory requirement.”