Brexit is forcing 39% of UK asset managers to consider moving operations and staff out of the UK, while a quarter have already confirmed a location, according to research published by EY.
EY's Brexit Tracker, which monitors public statements made by 222 of the largest financial services firms in the UK, found that of the 57 wealth and asset management firms included, ten have already selected Dublin as their domicile of choice and a further four have selected Luxembourg.
The UK's departure from the European Union puts in doubt the asset management industry's capacity to continue to delegate the management of funds domiciled in the bloc back to the UK. In addition, there are still unanswered questions as to whether UK investors will be able to invest in those funds if their distribution to the UK is prohibited post Brexit.
EY's survey also found 28% of firms have made, or intend to make, regulatory or structural changes to their products because of Brexit, such as shifting client assets from the UK into European vehicles, launching new funds abroad or creating overseas fund ranges.
In addition, 23% of firms have announced they are hiring or have hired new staff since the 2016 referendum, either in Europe or in the UK, as a direct result of Brexit.
UK head of wealth and asset management at EY Gill Lofts said while the impact on the industry is "less pronounced than investment banking" when it comes to relocating staff, such moves are "inevitable".
She added: "There will, however, be major structural shifts in relation to products and distribution to allow fund management houses to continue to serve their customers in the event of a hard Brexit, both in the UK and overseas."
However, Lofts also noted: "Despite disruption and the requirement to invest in operations, the signs are that the industry remains cautiously optimistic about its growth potential.
"Firms appear to be increasing rather than decreasing headcount which can only be taken as a positive, but which firmly underlines that access to talent will remain paramount once the UK leaves the European Union."
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