One-click wealth management
Successful fintech is following the model of retail, putting the user experience at the forefront of development.
2 March 2017
The importance of rock-solid data protection has never been more obvious with attacks on large companies like Three Mobile, Tesco and professional services firms, like the now infamous Panamanian law firm Mossack Fonseca in 2015.
Hence this month the government of Jersey published its first island-wide cyber security strategy, making all businesses aware of their cyber risks and responsibilities, while the government raises awareness and directs its own resources to securing the island’s systems.
Richard Prosser, head of the Estera group’s global trusts service line, says: “Jersey is still considered a pre-eminent location for offshore structures with international firms with good reputations. We don’t want the island to suffer any reputational damage, such as a loss of information or data, which would be dreadful for the island regardless of who the target was.”
He adds, “If one of the large trust companies suffered a data breach, that would be damaging for the whole industry, so we are all doing what we can to make sure that doesn’t happen. At the end of the day, the island rises or falls on its reputation.”
So far, the fallout from the Mossack Fonseca situation has been nothing but opportunity. David Rimmer, client relationships manager at fiduciary firm Hawksford, says: “The Panama papers explosion has seen a flight to quality jurisdictions in the Channel Islands.”
He points to new work coming from wealthy families in the Middle East and Asia, as well as high net worth European or UK-based families. Many are attracted by the structures on offer, says Rimmer: “Clients in Asia are tending towards the Jersey Charitable Trust or Jersey Foundation for philanthropic purposes, depending on the time horizon for the client and the asset classes being managed. The Jersey Reserved Powers Trust is also very popular with clients based in Asia because it enables the family to retain an element of control over the trust assets.”
The Jersey Private Trust Company is also growing in popularity, he adds: “Because the Middle East is tax neutral, clients from that region will tend to favour PTC. The PTC is the trustee of any underlying trusts, which is a private arrangement by its very definition. Middle Eastern family representatives may join the board of the PTC to assist with any decision making, and that is one reason why it is a valuable proposition.”
Work for the UK’s wealthy individuals and families continues to keep Jersey advisers busy. In December, the UK government announced changes to inheritance tax that will introduce charges for UK residential property held by non-domiciled individuals through overseas vehicles as of 6 April 2017. Naomi Rive is group director at Highvern Trustees, and says: “At present we are very busy with restructuring work required prior to 5 April. This predominantly relates to the de-enveloping of UK residential property following the changes to the UK tax regime.” She add such work has provided a great opportunity to talk with clients about their wider wealth planning, and has led to some introductions to the next generations.
Furthermore, says Rive: “Aside from restructuring, we are also becoming increasingly engaged in quasi-family office work with ultra-high net worth families looking for us to support them in an array of activities, including coordinating their international tax and legal advisers.”
Others report similar trends for family office work. Ana Ventura is a partner and head of the Jersey family office division at Stonehage Fleming, and says: “Traditionally, our clients have sought us mostly for support with administrating asset holding structures and acting as trustees. But more recently, there has been a noticeable demand for family office advice, especially around protecting their wealth across generations. Supporting the next generation and guiding families to consider how they will pass on their wealth.”
There is no shortage of inbound work, as clients continue to be attracted to Jersey. Sevyn Kalsi, a senior associate in the Jersey private client and trusts team at law firm Ogier, says: “We live in an entrepreneurial world, and we are seeing clients from all walks of life who come from all corners of the globe. There is no longer, if indeed there ever was, a template profile for a typical offshore client. Their needs range from succession planning and corporate structuring to the provision of a stable financial and corporate base for internationally mobile families.”
He concludes: “Jersey provides a reputable platform to meet such clients' needs, somewhat sheltered from political and other external forces, which can be very attractive in bringing a sense of calm and clarity to clients in a hectic and uncertain world.”
With the latest investments in cybersecurity, Jersey is laying the foundations which will protect their reputation now and for future generations.