That means this is less about what goes on in the brain of Boris Johnson and more about the implications on financial planning for those who are moving to and living in France.
I have been giving international financial advice for more than two-and-a-half decades, so am no stranger to talking about currency, remembering life before the euro.
In that time I have seen many private individuals try to make money out of betting on the direction of currency.
The score so far? All to currency and zero to the would-be punters.
Don’t get me wrong. I have met many lucky people for whom it worked out well, due to pure luck with unplanned timing, but many more who were unlucky.
I have seen governments (remember Norman Lamont devaluing the pound and crashing out of the Exchange Rate Mechanism?), banks and financial institutions (remember Eagle Star and its hedge currency, the Eagle, which helped bring the company to its knees and subsequent sale?) get it wrong again and again.
I have never experienced, in all my time, such a huge wave of concern for where the British pound is headed.
This is incredible, given that the last big currency crisis for sterling was only 2008.
I can have 10 conversations a day and get 10 different views on where currency is going.
I have never viewed my role as playing a currency fortune-teller, since the foreign exchange market is exponentially more complex than even stock markets and arguably way more open to manipulation.
What I do care about is what it means for my clients and, of course, Connexion readers.
What is interesting is that most people tend to think in absolutes. They just want to know which currency to be in – by which they mean the winning one – and then have all their money in that currency.
The direction of the currency is as unknowable as the outcome of the whole political situation: such a play is akin to a turn of a casino’s roulette wheel. Will the outcome be black or red?
Financial planning is significantly more complex than gambling on roulette.
It needs to be because it affects the lives of those being advised, their family and loved ones, and it is no joking matter. The objective is to achieve an outcome that is one that can be lived with, not an all-or-nothing affair, as is the habit of a gambler.
In relatively ordinary times I have been a big believer in the simple rule of holding the currency in which you spend.
Chasing better rates in other currencies rarely works, usually because currency value plummets when rates start to fall, leaving any advantage wiped out and often resulting in a heavy loss.
During the financial crisis of 2008, I suggested to many clients that they stop drawing from their UK pensions and draw from their euro investments until sterling picked up, and then top up their investments from their accumulated sterling when the pound recovered.
This worked well as the crisis was a relatively short one. The banks had been bailed out, so it was only a matter of time before credit started to flow again, albeit not quite as before.
This situation is different, as a hard Brexit would not be a slowing of an economy due to the loss of credit and market liquidity, but a huge sudden shock to the nuts and bolts of the economic engine that keeps UK plc running that comes with running out of fuel.
What I have suggested is that people holding only (or significant) sterling work out what money they may need over the next few years in a very negative scenario.
Someone holding, for example, £500,000 in liquid assets who requires £30,000 per year to live on might want to move as much as £150,000 to euros, and give themselves up to five years of future income.
Many might focus on the 30% traded at an agonisingly poor rate of exchange, but sensible people who want to get on with their lives focus on the 70% that has lost nothing and the fact that they can watch any crisis unfold as a spectator rather than an unfortunate victim.
If, by some miracle, Brexit is cancelled and sterling rockets, then there is still 70% of the capital remaining to take advantage of the better rate. To all those who are still determined to spin the currency roulette wheel, I wish you the best of luck but I remind you: just like a casino, the odds are never in your favour.
This column was written by Robert Kent of Kentingtons financial advisers. Seewww.kentingtons.com
