Guernsey’s a pillar of strength in the offshore wealth management sector
Matthew Gilligan, Louvre Trust (Guernsey) Services Client Relationship Manager, turns his thoughts to Guernsey’s position as an offshore wealth management centre: although in size it might not match up to its competitors, it’s the age-old question of quality over quantity.
A recently published report ranking International Wealth Management Centres (‘IWMs”) by Deloitte reviews nine jurisdictions in terms of competitiveness, size and performance.
Guernsey clearly cannot match the nine highlighted IWM centres as recorded by Deloitte in both market volume and assets under management but if we compare them to some of the legacy offshore/low tax jurisdictions such as Switzerland (#1), Luxembourg (#7) and Panama & the Caribbean (#9) there is an obvious shift in market dominance from these jurisdictions to Guernsey.
Guernsey has over 100 regulated trust companies providing the breadth and depth of expertise in the island to hold its own and provide international clients with a one-stop shop for wealth management.
In the fiduciary sector, Guernsey has grown in popularity exponentially in the last few years, with a particular shift away from using BVI companies in favour of local companies. This is more prevalent with Swiss firms using Guernsey for their own trust/offshore companies (with Switzerland not yet adopting their own Trust Law).
A good example of a competitive edge is Guernsey’s robust constitutional, legislative and regulatory framework. This provides a safe and secure environment for private wealth and because the island was one of the first jurisdictions in the world to regulate trust and company service providers, we have a culture of professionalism that, in my opinion, is not matched elsewhere.
The island offers sophisticated and autonomous financial solutions for the modern-day client. Guernsey’s strength has also been its geographical, political and legal stability together with being truly independent of both the EU and the United Kingdom.
In more recent years Guernsey has been championed as a leader for international regulatory and transparency standards as recommended by FATF, and was an early adopter of both CRS and FATCA.
Guernsey’s finance sector has been underpinned by a culture of innovation for decades, and the autonomy enjoyed enables it to respond quickly to the evolving regulatory landscape and market access requirements.
Of course, there are a number of areas where improvements could be made but these are tweaks rather than a revolution of change needing to be made.
It would be important to develop more airlinks links between Guernsey and Europe which would mean improving runways and investing further into travel for the future. The links would undoubtedly improve tourism into the islands but would also offer European clients more direct routes to Guernsey and in turn develop business relationships further (work is currently being undertaken to investigate the viability and environmental impact of a runway extension).
Guernsey holds its own against leading wealth management hubs around the world. How? The island offers innovative and niche solutions for investment funds, pensions, green finance, captive insurance, yacht and aviation registration. It is these specialist services together with Guernsey’s highly tuned laws and regulations which I believe will see the island competing, year on year, with some of the largest international wealth management centres.