Pension savers, investors and expats need to shore-up financial planning strategies and portfolios ahead of Brexit negotiations, warns the boss of one of the world’s largest independent financial advisory organisations.
The warning from Nigel Green, founder and CEO of deVere Group, comes as it looks increasing likely that the British government is opting for a so-called hard Brexit.
Mr Green observes: “Recent comments from the Prime Minister, Theresa May, suggest that the UK is heading for a hard Brexit – whereby access to Europe’s single market would be forgone in favour of tighter controls over immigration.
“I would suggest that pension savers, expats and investors need to take a look at their financial planning strategies with a view to mitigating any potential risks and to be able to take advantage of the opportunities.”
The pound fell again over the weekend after Theresa May hinted that her negotiations would put immigration controls above access to the European single market. The pound has already dropped by almost 20 per cent against the dollar since Britain voted to leave the EU in June, making it the world’s worst-performing currency in October.
“The pound has experienced major volatility since the Brexit vote was announced”, Green continued.
“Investors should consider taking precautions against the potentially significant adverse effects on UK assets and avoid companies relying on UK earnings only. This can be achieved by increasing exposure to overseas investments, in the case of the UK it means favouring FTSE 100 stocks over small and mid-cap stocks. But it also means rebalancing portfolios in favour of international stocks, bonds and perhaps property.”
“The plummeting value of sterling has a serious negative impact for the millions of Britons overseas who live off a fixed income from Britain, such as a UK pension. The cost of living becomes more expensive and a proportion of their disposable income is eroded away.”