The UK remains the top European destination for financial services investment


In a turbulent time, following Brexit and the Coronavirus pandemic, there is some good news on the economic front.

The recent findings of the EY (part of the Ernst and Young Group) Attractiveness Program for 2020. confirmed that although the total number of FDI (Foreign Direct Investment) projects fell by 12%, the UK is still seen by investors as the top European destination for investment in financial services.

Despite the then uncertainty about Brexit, in 2019, the UK landed 99 FDI projects. It represented a more than 100% lead over the second-placed country, Germany, who recorded only 43 new projects.

However, in 2020, with the full impact of the COVID-19 pandemic, the UK landed only 56 new projects, and France overtook Germany for second place, attracting 49 new programs. The UK still tops the leaderboard, but the gap between first and second-placed nations was reduced to 14%.

As economies worldwide begin on the road to recovery from the ongoing Coronavirus outbreak, 48% of foreign investors see the UK as having the most investment-friendly pandemic recovery program. In addition, 50% believe the UK to be the most attractive destination for investment in financial services.

As for other European countries, Germany was second with 30%, 33% metric, while in joint third place with 21%, 21%, came France and Switzerland.

There was also good news for the city (London). 44% of survey respondents saw London as being Europe’s most attractive target for investment, with Stockholm coming in second with 19% of the vote and Amsterdam in third with 17%. It is excellent news for the Fintech sector in the UK.

The last 15 months have seen the results of the COVID-19 pandemic devastate our economic and social lives. People losing their jobs, the country going into self-isolation, and the new working from home ethic, have all taken their toll one way or another. As a result, the stock markets have seesawed, and financial advisors have had their work cut out for them.

But people have kept their heads, and the money markets, although having been adversely affected initially, quickly recovered and went on to make significant gains.

With nearly 11 million unemployed, the market has reached new highs this year on the back of hopes of a new period of growth and recovery thanks to the vaccine rollouts. The initial rapid decline in market valuation has been countered by an equally fast recovery, and thanks to that sound action from financial professionals, the impact on long-term investing has been markedly limited.

The consensus is that there will be something of a withdrawal in the coming months, but it will be contained, and the expectation is that markets will have fully recovered again by the end of 2021.

This forecast has drawn in a new type of investor, many of whom are young and are investing for the first time.

It is all thanks to wealth management companies that investors here in the UK have been able to weather the storm.The past year has been crazy by any standard and things had to change. The UK investment management firm Moneyfarmhas not only changed the way they work, but to keep up with the changing situation, they have rebalanced their portfolios – four times.

The situation nonetheless remains volatile. The emergence of the Delta strain of the virus and concerns as we work our way towards next winter will continue to worry everyone – not just investors.

As long as financial professionals keep their fingers on the pulse and take whatever avoiding action is necessary, such as a fifth rebalancing of their portfolios, we have good reason to remain calm.

What has happened over the past year is a clear justification to the view that investing in things like Stocks and Shares ISAs, is for the long term. Being forced to access savings when the market has nose-dived, as it did in March last year, can be disastrous.

But as the recovery goes to prove, investing in stocks and shares with professional help is safe long-term, especially when you see how much more interest your savings can earn, and all tax-free.