How Guernsey is part of the British financial services family

14 May 2019

Written by Dominic Wheatley Guernsey Finance

Ahead of City Week 2019, which Guernsey Finance will be exhibiting at next week, GF Chief Executive Dominic Wheatley outlines Guernsey’s specialisms and complementary role to the City of London.

Guernsey’s financial services industry, the engine of the island’s economic growth over the past 50 years, values its relationship with the City of London and its position within the British finance industry.

That’s just one of the reasons why we were keen to be a partner with City Week in 2019, highlighting the important role Guernsey plays as a conduit through which billions of pounds of investment enters the City’s capital markets. The UK finance industry makes significant revenues on the back of Guernsey’s finance sector – more than £1 billion in asset management fees alone.

Some £35 billion from Guernsey investment funds is invested into UK assets, most into long-term tangible assets, including schools, hospitals, airports and roads, and businesses of all sectors and scale – and the majority of that money comes from investors outside the EU, demonstrating the island’s key role as a facilitator of inward investment into the UK.

Our alternative investment specialism also provides complementary options to trustees and investment managers looking after UK pension funds, providing greater financial security and improved returns helping to secure the financial futures of workers in the UK and elsewhere.

Tens of thousands of UK jobs are created and sustained by our private equity funds supporting UK start-ups, development businesses and turnarounds.

Guernsey’s business model has changed over the years, adding increased diversification across our industry sectors to traditional wealth management and financial structures such as captive insurance and trusts. It now encompasses both facilitating international money flows and providing specialist regulatory environments designed for low volume niche products, such as insurance-linked securities (ILS), pension longevity structures, and associated bespoke administration. In sectors such as ILS, we develop real-world solutions for real-world problems.

For 20 years, Guernsey has been at the forefront of developing and meeting evolving global regulatory standards. We are a fully contributing partner of the global financial services network, and pioneered the regulation of fiduciaries and trustees in 2000.

Our attraction as a finance centre lies not only in our neutral and transparent tax environment – which ensures that those undertaking business, both private and corporate, must fulfil their proper obligations wherever they are taxed – but in our ability to create specialist niche business environments that meet the needs of our clients and markets.

As part of the British financial services family, we believe we should take every possible step to prevent harmful tax practices, and we operate the most stringent anti-money laundering regime in the world.

The City’s view of us is very different from that some (mis)represented in the media. They rightly see us as a leader in international standards of AML. Every time we are assessed, we are in the vanguard of international jurisdictions. The City benefits from the islands being part of its suite of offerings, as we maintain the quality standards that London is known for.

The substance in our business environment offers clients the high degree of stability, reliability and certainty they seek, in a jurisdiction that is in tune with the future direction of the global financial services industry.

Guernsey has shared values with the UK. We celebrate much of the best of the country as you do. We want to be strong partners in Britain’s economic future, and continue to be a part of its financial services family, and we believe we are well placed to do so.

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