It also reveals that 82% believe the number of UK-based financial services firms seeking to establish subsidiaries in the EU will increase over the next three years.
This is despite 44% of investors saying they expect UK asset managers to be able to passport their funds into the EU after Brexit, although 30% do not believe this will happen.
MPG chief executive officer, Jeremy Leach, said: “Although a sizeable minority in our survey believes UK asset managers will be able to passport their funds in the EU after Brexit, I think this will be unlikely.
“Current members of the European Economic Area such as Switzerland, Liechtenstein and Norway do not have this privilege. As such, many asset managers and other UK financial services companies will look to establish a secondary entity somewhere in Europe post-Brexit.
“Respondents believe the most important considerations for UK companies looking to set up another operation elsewhere are a comprehensive legal and regulatory framework, followed by the tax regime, and economic stability.”
This comes after The Bank of England gave financial firms a deadline of 14 July to explain how they are planning for the UK’s departure from the EU, including for the possibility of a hard Brexit.
In a letter from the Bank’s prudential regulation, deputy governor, Sam Woods, it was acknowledged that many firms are well advanced in their contingency planning, but that others are not.
“Our current assessment is that the level of planning is uneven across firms, and plans may not be being sufficiently tested against the most adverse potential outcomes,” it said.
“Where firms currently rely on passporting arrangements to undertake business, we expect them to have plans that cover a range of potential scenarios. As part of this, firms should develop contingency plans for authorisation, including possible structural changes such as setting up a subsidiary.”
The MPG believes that one of the best places to set up such a subsidiary is Malta, due to its EU membership, efficient regulatory and legal environment, and highly educated, English-speaking workforce.
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