Brexit: Questions
and Answers

To help you understand more about Brexit and your investments with us, we’ve put together responses to some of the most frequently asked questions.

What is Brexit?

Brexit is the withdrawal of the United Kingdom from the European Union.

The UK took a decision through a referendum 23 June 2016 to leave the EU block, and subsequently triggered Article 50 of the Treaty of the European Union on 29 March 2017.

Under that treaty, the UK had two years to negotiate a Withdrawal Agreement and a framework for a future relationship with the EU before the point of the UK’s exit from the EU at 11pm on 29 March 2019. A deal was negotiated and endorsed by the EU but so far that hasn’t been agreed by the UK parliament. So the EU has agreed to extend the UK’s point of exit date to 31 October 2019 while the UK works to find an agreed way forward. The terms of the extension allow for the UK to leave earlier than 31 October 2019 if a solution can be found sooner than that.

Assuming a final deal is struck before the UK’s exit date, a transition period has been proposed. This is likely to mean that European laws continue to apply in the UK until at least the end of 2020 and would give Britain time to make new trade deals with the EU.

What do we mean by a ‘no-deal’ Brexit scenario?

A ‘no-deal’ scenario is one where the UK leaves the EU and becomes a third country at 11pm GMT on 29 March 2019 without a Withdrawal Agreement and a framework for a future relationship in place between the UK and the EU.

In this scenario there would be no agreement to apply any of the elements of the Withdrawal Agreement.

This would mean scrapping the 21-month transitionary exit period, and the exit will be immediate without an agreement and no adjustment time to allow for changes in laws or negotiations for trading deals.

The UK is therefore preparing for a scenario where there is no UK-EU agreement in place on the exit day.

Without a bilateral trade deal with the EU, Britain would be subject to World Trade Organization (WTO) rules. UK exports would face the same customs checks and tariffs as other countries outside of the EU.

What does a ‘no-deal’ Brexit mean for UK financial services and firms and funds?

Recent ‘no-deal’ Brexit technical guidance released by HM Treasury and the FCA indicate that UK-based firms that only do business in the UK may be affected less directly than others, or not affected at all.

However, firms that carry out business between the UK and the European Economic Area (EEA) – whether through a passport (referred to as ‘passporting’) or directly under EU legislation - will be affected.

Passporting allows firms authorised in an EEA state to conduct business within other EEA states based on their ‘home’ member state authorisation.

After Brexit, and any implementation period, passporting in its current form will end for the financial firms currently using it in the UK. This may change depending on any future agreement with the EU.

Therefore a ‘no-deal’ Brexit will have a direct impact on:

  • firms and funds based in the UK that conduct business in the EEA
  • firms and funds based in the EEA that carry out certain types of business in the UK

In a ‘no-deal’ scenario, firms and funds would automatically lose their passporting rights and licenses on 29 March 2019, meaning they won’t be able to sell their services across the EU and the UK without having to obtain licenses in each individual country.

The UK government has committed to taking unilateral action, if necessary, to resolve this issue. However, this is not sufficient to fully address the risks, and coordinated action with the EU is necessary.

What’s the timing for Brexit?

The UK is currently due to leave the EU by 31 October 2019.

What happens next?

That’s the big question. The ball is currently in the UK’s court to propose a way forward from the Withdrawal Agreement and framework for a future relationship that had been negotiated and agreed between the UK and EU negotiating teams led by UK prime minister Theresa May and the EU’s chief negotiator Michel Barnier. If nothing is finally agreed by both sides before 31 October 2019 the legal default now is that the UK will leave the EU with no deal on that date.

How could Brexit impact me and my investments with Alliance Trust Savings?

Alliance Trust Savings is a UK-based firm authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. We do not carry out business in the EEA- whether through a passport or directly under EU legislation.

As such, we don’t anticipate any major changes to the way we currently conduct business with our customers in the event of either a ‘deal’ or ‘no-deal’ Brexit.

We do have a number of customers who now live in the EU, however we don't anticipate any changes to the way these Accounts are serviced, and we don't expect any change to our Terms and Conditions as a result of Brexit.

How is Alliance Trust Savings planning for Brexit?

We continue to monitor the situation. We also receive regular updates from our regulator, the FCA, and firms that we do business with.

Predominantly we are a UK business providing services to UK residents, and where in place, through UK-based advisers.

Does Alliance Trust Savings have any plans to leave the UK?

No, we are a UK-based company and will continue to operate our business in the UK.

How will Brexit affect my personal information? Will I still be protected?

The rules and regulations that we work within are all UK-based and therefore we are not expecting any changes to these.

The UK government has confirmed that the UK’s decision to leave the EU will not affect the implementation of the new EU General Data Protection Regulation (GDPR) for the UK.

We will continue to treat the personal data of current and prospective customers’ in accordance with the requirements of applicable data protection and data privacy legislation applicable in the UK, and to our Terms and Conditions.

How safe are my investments with Alliance Trust Savings?

Investments that we hold on your behalf will be held in accordance with the FCA Rules relating to client assets.

Or, in certain circumstances for overseas investments, we will deposit them with a third party custodian who may in turn hold them through its sub-custodians.

In certain circumstances, investments might be held in your name or a name nominated by you in certificated form, where certificates are issued.

I live in another EU country will you continue to service my Account?

Yes, we will continue to provide a service to all our customers on our platform.

We do recommend though that if you reside outside of the UK that you use our online platform and have your contact preference as ‘email’ so that there are no delays in us communicating with you.

Will you continue to be able to protect my cash and investments?

Your cash and investments will continue to be protected in accordance with applicable Financial Services Compensation Scheme (FSCS) and client money and asset rules as contained in our Terms and Conditions. Please refer to https://www.fscs.org.uk for more information.

I live in the UK but my financial adviser is based in the EU – can they still give me advice?

If they do not have a passport to conduct business in the UK then it is unlikely that they will be able to continue in their current role. It is best to contact them directly to discuss their specific circumstances.

This, however, will not stop you from continuing to have an Account with us.

Are there any immediate changes to pension regulations because of Brexit?

Pension rules are determined by HMRC and the FCA. There are no plans at present to alter these as a result of Brexit.

Could there be changes to pension freedoms and when I can start to take a pension?

Pension rules will not change as a result of Brexit.

While the government can make updates to the pension rules, we will continue to make you aware of any changes as and when they happen.

Will there be changes to the tax relief I get on pension contributions?

There will be no change to tax relief as a result of Brexit.

If there are any changes for any other reason, we will continue to keep you up-to-date.

Will there be changes to the rules around ISAs?

The ISA is a UK-regulated product and is not impacted by Brexit.

What will happen to my EU funds?

The UK government and the FCA have stated their commitment to provide European fund managers a route to continue providing products and services to UK clients in the event of a ‘no-deal’ Brexit.

European fund managers will have to notify the FCA of their intentions to continue offering their funds from early January 2019, with the window closing before Britain leaves the European Union, which is currently set for Friday 29 March 2019.

Details of investment funds with a temporary permission, which will continue to be marketed to UK retail investors, will be shown on the FCA's register.

We will continue to monitor developments in this area and will provide updates in due course on the status of European Funds that are available on our platform and the likely impact on our clients.

However, you may wish to contact the European fund managers directly if you hold European funds.

How volatile will the market be after Brexit and how can I protect my investments?

Financial markets traditionally react negatively to uncertainty. However it is impossible to state what will exactly happen.

It's therefore important that you regularly review your Account(s) and take any action you feel is necessary. If you are unsure, you should seek professional advice.

What will happen to my pension/income if the value goes down?

We will continue to pay out the level of income that you have requested from your pension.

We recommend that you review your pension on a regular basis to ensure that it continues to provide the level of income you expect for the future.

What should I do to plan for Brexit?

We recommend that you regularly review your Account(s) and take any action you feel is necessary. If you are unsure, you should seek professional advice.

Should I change my investments as a result of Brexit?

We are an execution-only platform and cannot provide financial or investment advice. If you are unsure you should consult a financial adviser.

How can I keep up to date with changes?

We will update our website with key changes.

In the event that we determine that changes are required that will impact you or your Accounts with us, we will inform you as soon as possible.

How do I avoid Brexit scams?

During this period of uncertainty there is a greater risk of financial crime and Brexit related scams.

Here are some tips to protect yourself:

  • beware of all unexpected calls, emails and text messages
  • a genuine bank or organisation will not ask for your PIN, full password or to move money to another account
  • never give out your personal or financial details unless it’s for a service you want to use, and where you trust the provider
  • don’t be pressured into acting quickly – a genuine bank or financial services firm won’t mind giving you time to think
  • always double-check the web link and company contact details in case it’s a ‘clone firm’ pretending to be a real firm
  • if you get an email, expand the pane at the top of the message and see exactly who it has come from – if it’s a scam, the email address of the sender may be filled with random numbers or be misspelled
  • beware that fraudsters can ‘clone’ these email addresses to make their emails seem genuine

Where can I find out more?

The government has provided some useful information which you may find of interest:

Taking Stock

Countdown to Brexit

Investing through uncertainty is the prevailing theme explored by our expert contributors in this issue. Here they look at the potential implications of Brexit over the longer-term. In the overall scheme of things for investors, how significant is this? And what are the threats and opportunities it might bring.

Find out more
taking stock

Alliance Trust Savings Limited is registered in Scotland No. SC 98767, registered office, PO Box 164, 8 West Marketgait, Dundee DD1 9YP; is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, firm reference number 116115. Alliance Trust Savings Limited gives no financial or investment advice. ‘Alliance Trust Savings’, ‘ATS’ and 'AT Savings' are all brand names of Alliance Trust Savings Limited together with the ‘Alliance Trust Savings’ logo are owned by and used with the permission of Alliance Trust PLC, the previous owner of Alliance Trust Savings Limited.