Investors should not panic over the UK's voting in favour of leaving the EU, saying it will take some time for the changes to take effect, says Instreet managing director George Lucas.
In a statement, Mr Lucas said he expects the UK to remain a member of the EU for several more years.
“In the meantime, UK politicians could drag out the process or try to find a solution that replicates EU membership in all but name,” he said.
“This also means there would be time to clear up some of the uncertainties about the wider impact of Brexit, notably the arrangements which would govern UK trade with the remainder of the EU and the rest of the world.”
Mr Lucas said this may also have little effect on trade partnerships.
“Europe is Britain's biggest trade partner but, as a percentage of trade, this has reduced dramatically since the global financial crisis as Europe has stagnated whilst China, the US and emerging markets have grown,” he said.
“And finally, as expected, the markets have reacted negatively, driven by fears about the British economy. This may also cause further delay with a US Fed hike and induce additional monetary easing elsewhere, including from the European Central Bank and Bank of Japan.”
Last week, the British pound fell by as much as 10 per cent on Friday afternoon and stockmarkets around the world plummeted as UK citizens voted to leave the European Union.
The S&P/ASX 200 was down 3.8 per cent late on Friday as it became clear the UK referendum on whether to leave the European Union had been won by the 'Leave' side.
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 16 Nov 2018Government sets $51m to pursue misconductBy Eliot Hastie
- 16 Nov 2018The financial advisers most people don’t read aboutBy James Mitchell
- 16 Nov 2018Clients expect advisers to understand their situationBy Eliot Hastie
- 16 Nov 2018Retirees hit hardest by franking credit changes, says FSCBy Sarah Simpkins
- 16 Nov 2018Trust in advice more important than everBy Stephanie Aikins
- 15 Nov 2018We’ll lose advisers through FASEA but it’s necessaryBy Adrian Flores
- view all