An original version of this article was by published by Family Office Elite, July 2014.
By Fiona Le Poidevin, Chief Executive of Guernsey Finance
Guernsey’s finance industry is well placed to provide the widest scope of family office (FO) services.
Regarded as a jurisdiction of choice for both wealth management and investment funds, the island’s providers are able to combine traditional values with modern technology to help clients manage their wealth effectively, between locations and over generations.
The Island’s close proximityegarded as a jurisdiction of choice for both wealth management and investment funds, the island’s providers are able to combine traditional values with modern technology to help clients manage their wealth effectively, between locations and over generations.
The Island’s close proximity to the City of London and mainland Europe, as well as a convenient time zone, adds to the Island’s appeal. As does the fact that the Island boasts 150 licensed fiduciaries, ranging from multinational organisations to independent, boutique operations, all specialising in the preservation of individual and family wealth and the inherently varied nature of FO structures.
FOs are equally put at ease because of Guernsey’s world-leading standards of regulation. In 2011, the IMF reported Guernsey as being compliant or largely compliant with 47 out of 49 of the Financial Action Task Force (FATF) recommendations on Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) – the highest standard of any jurisdiction so far assessed. Guernsey was also one of the first places in the world to regulate trust and corporate services providers.
FO services in Guernsey
Guernsey providers are well versed in the traditional single family office (SFO) concept of providing management services in relation to household staff, travel arrangements, property, payroll, investment programmes, philanthropy coordination and succession planning, as well as some degree of involvement with a core family operating business.
However, SFOs are also now expanding into Multi Family Office (MFO) operations, an increasingly common trend being seen in Guernsey over recent years. The MFO can still offer specialised services to a given family but will do so on a non-exclusive basis and will provide services to one or more other families (who may even be connected). This arrangement can deliver economies of scale and opens up the world of the family office, which was traditionally only available to the super wealthy, to those with smaller fortunes or an appetite for more limited and cost effective family office services.
Guernsey’s corporate, trust, foundation and limited partnership structures can be utilised to hold assets of all types across the globe. In addition, legislation enabling the establishment of limited liability partnerships under Guernsey law was introduced in May 2014.
Guernsey is perhaps most well-known for pioneering the Protected Cell Company (PCC) concept more than 15 years ago. The PCC is now used across investment fund platforms, captive insurance vehicles and structured products, while one of the most innovative applications of the tool is in the field of family wealth planning. Along with the utilisation of Incorporated Cell Companies (ICCs), these private cell structures can be used to ring-fence different assets for different strands of a particular family or simply for segregation and risk management purposes.
The end of last year saw the establishment of 2-REG, the Guernsey-based Channel Islands aircraft registry, which with the nationality mark of '2' followed by four letters, allows for particularly attractive registration names, such as 2-COOL or 2-PLAY. This development followed the creation of the world's first image rights law and register just over 18 months ago which will allow celebrities and corporates to protect and exploit their image and brand.
These are just a few of the many advantages offered by Guernsey as it continues to demonstrate its capabilities to evolve its structures and products to the needs of international clients and to develop solution based initiatives in partnership with the financial services industry.