Guernsey pivots to private capital

28 November 2019

Guernsey has more than 50 years of history in providing specialist wealth management and fiduciary services. The island is pivoting to deepen its expertise in family office services. In an interview with STEP Journal, Guernsey Finance Chief Executive Dominic Wheatley explains why.

What has Guernsey’s traditional success in wealth management over the past 50 years been based on?

Guernsey has thrived on the three cornerstones of stability, security and service. We have a history of 800 years of constitutional independence, coupled with political and economic stability, which creates a strong and stable platform. In 2001 Guernsey became one of the first jurisdictions to regulate trust and corporate service providers, enhancing the protection of beneficiaries. And Guernsey providers specialise in bespoke structuring to suit the visions, values and purposes of their clients.

Why the focus on family offices?

With the development of a new Policy Framework for financial services in the island, the island is seeking to focus on deepening and broadening its traditional specialisms.

The well-established offer of sophisticated, discreet service of an unrivalled depth and breadth, across not just fiduciary services but also funds and wealth management, lends itself to a greater focus on the provision of services to private capital, private wealth and family offices.

Guernsey’s finance sector is aiming at the higher end of the private wealth territory. To achieve this, there will be development of more specialist products and a focus on ensuring the legal, regulatory and commercial environment.

The family office concept has been around for many years and the objectives for servicing that market remain broadly the same – to provide a centralised and cost-effective hub to manage the financial and other affairs of families. But the activities, structures and asset classes involved are ever-more diversified and sophisticated. Family offices can be complex – Guernsey will seek to simplify.

Establishing new or relocating existing structures to Guernsey provides high-value work for Guernsey professional firms and creates new jobs when family offices employ their own staff in the island.

What are you doing?

Guernsey’s business-friendly environment, including regulatory pragmatism and flexibility, provides the perfect platform for the establishment and operation of family offices.

Our plans involve looking to enhance the regulatory regime for family offices and private capital, which caters for the needs of these clients and protects their interests. More detail will emerge over the next couple of months, but we have three or four developments in the pipeline which will really polish our offer in this space.

What are you seeing in the family office sector that excites you?

It is clear that there is a growing appetite to set up family office structures in Guernsey.

David Bowen, who leads Deloitte’s Private Office Consulting practice, told our Private Wealth Forum in London late last year that high net worth individuals were considering new jurisdictions as part of moves to establish substance and particularly for US families internationalising their affairs. Protection for data and cyber security was also seen to be very important.

Nicholas Donnithorne, Head of the Trust and Pensions team at Guernsey law firm Babbe, also confirmed that there had been interest in sizeable family offices relocating to Guernsey over that period, attracted by the island’s principles of integrity and transparency.

It has advised on a £1 billion structure relocating from Monaco, on placing a Delaware £2.5 million family office into a new Guernsey structure, and the conversion of a traditional £300 million trust and company structure into a family office.

What’s your ambition in this area?

We intend to create the most supportive global environment for the provision of specialist single and multi-family office services, putting Guernsey front of mind of professional, professional advisers, and their client base, for servicing private clients and private wealth.

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