Financial Industry Insights from Advisors Asset Management


Brexit – State of Play

The March 29, 2019 11:00 p.m. deadline for the United Kingdom’s exit from the European Union is fast approaching. Such a constitutionally consequential event will, by nature, demand excruciating political high drama. All the essential ingredients are in place: power, money, intrigue, betrayal and – for those who love suspense (investors excluded) – the ending is a complete secret. The final episode, I am sure, will upstage The Sopranos and likely leave us all no less bewildered. I do not profess any greater knowledge of the expected outcome than anyone, but I think a recap of the series so far will set everything up for the “final season.”

A deal has been agreed upon between the European Union (EU) and the UK’s Prime Minister. The bill goes to Parliament for a vote on December 11. The outcome is likely to be resounding “no” – a defeat for the Prime Minster. The sum of “Remainers” and those “Brexiteers” unhappy with the deal overwhelm the “Compromisers” (that’s my term, don’t look for it in the press). The barrier to any Brexit bill centers on terms for Northern Ireland, specifically the border between the EU Republic and the North. The unresolved complication of a hard border between the two neighbors post Brexit is set to drive debate up to and beyond March. The Conservative coalition government relies, for its majority, on the North Ireland’s DUP (Democratic Unionist Party) who have already unanimously rejected the “backstop” (an unresolved, open-ended we’ll come back to you… solution) as an unacceptable indefinite cessation of authority to the EU. The question for Tuesday’s vote is how big the exit agreement’s defeat will be and will Prime Minister Theresa May and her government survive.

All outcomes remain on the table and I would hint at their likelihood in order as follows:

  1. An agreement is struck in time for March

  2. No Deal Brexit

  3. A new referendum

  4. No Brexit

One certainty is uncertainty, but the good news is that by the second quarter of 2019 we will know the result. How investors should traverse the coming months is unchanged, in our opinion. We believe that investors should consider selecting the very best quality companies that are growing and accumulate over time. Regardless of politics and geography, those companies that exhibit sustainable earnings growth over the long-term have the potential to generate superior returns in an ever-changing, ever-challenging and macro landscape.


CRN: 2018-1204-7086R

The opinions and views of this commentary are that of C.J. Lawrence and are not necessarily that of AAM.

This commentary is for informational purposes only. All investments are subject to risk and past performance is no guarantee of future results. Please see the Disclosures webpage for additional risk information at commentary-disclosures. For additional commentary or financial resources, please visit



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