* 'Yes' vote camp narrows gap, spurs uptick in calls
* Overall volume of calls still low
* Most adopt wait-and-see approach
By Simon Jessop and Nishant Kumar
LONDON, Sept 3 The prospect of major financial
fallout from a "yes" vote in Scotland's independence referendum
in two weeks time could have a big impact on retail investors,
but there are no signs yet they are moving their money.
An independent Scotland has an increased chance of becoming
a reality given the latest opinion polls.
And this has put the spotlight on what independence will mean
for Scotland's $250 billion economy, including what currency it
would use, all of which will have major implications for
investments in Scottish-based companies.
Credit rating agency Standard & Poor's, for example, warned
last month that a vote for independence could trigger a negative
rating action against insurance companies operating in Scotland.
But retail investors are showing no signs yet of voting with
their money, partly because there is so much uncertainty over a
range of issues from tax to regulation if there is a "yes" vote
in the referendum on Sept. 18.
A small number of retail investors put in calls to their
financial adviser after polls showed the gap between the "yes"
and "no" votes narrowing.
"The feedback from our helpdesk is that we're not being
deluged with calls, a few a day is the kind of numbers," Tom
McPhail, head of pensions research at fund supermarket and
financial advisor Hargreaves Lansdown, said.
"But if there's a major news story, such as the poll earlier
in the week, it focuses people's attention on the likelihood of
a 'yes' vote and triggers calls," he said.
That sentiment would likely lead to clients considering
their options over the next two weeks, an analyst at investing
platform Trustnet Direct said although there was no panic yet.
Of the nearly $3 billion pulled from mutual funds investing
in UK stocks this year, two-thirds were withdrawn from money
managers primarily based in Scotland, data from fund tracker
Lipper showed. But analysts said factors including some mergers
and acquisitions in the industry and poor performance were the
main reasons behind the outflows.
"Whilst we have had communications with customers regarding
the referendum, nobody has made reference to selling funds as a
result," Edward Johnson, commercial manager at investment
service provider Willis Owen, said.
Institutional investors, such as pension funds and other
professional investors, have poured $9 billion into
Scotland-based hedge funds firms, adding to a $10 billion
allocation last year, data from Eurekahedge showed.
The latest poll that showed record support for Scottish
independence caused some financial market turbulence, pushing
the pound to five-month lows this week.
But Scotland-based stocks have recently reversed months of
underperformance despite the prospect of a possible split from
the United Kingdom, partly because the immediate impact of a
"yes" vote is hard to quantify.
Retail investors who did make phone calls on Scotland had
questions around issues such as their investments in Royal Bank
of Scotland, certain Scottish with-profits funds, or
Scottish investment houses, McPhail said.
While some people were nervous, few wanted to sell, he said.
"The only thing we do know is that if there is a 'yes' vote
it will cost everybody money," McPhail said, referring to the
need to replicate institutions such as regulators, as well as
provide training, new investment literature and other
For Damian Smyth, head of intermediary sales at Alliance
Trust Savings, the increase in volume of calls over the last
week or so had been marginal.
"It's literally a handful, but the calls we have had are
about the implications for, more than anything else, the tax
wrappers; and we don't know," he said, referring to the tax
treatment of certain investments.
Smyth said callers seemed to be taking comfort from Alliance
Trust's plans to set up a separate legal entity south of the
border to protect UK investors based outside of Scotland.
"It doesn't appear to be causing investors any real concern
at this point."
(Reporting by Simon Jessop. Editing by Jane Merriman)