Robert Moore, Director – UK, Jersey Finance, talks to Reports Legal about supporting families and high-net-worth individuals with their investment strategies during tumultuous times.
How do international finance centres (IFCs) demonstrate stability in the current climate of geopolitical turmoil and global market volatility and why is this important in the private client market?
Recent economic and geopolitical instability has prompted a noticeable shift towards operating through and with IFCs that can confidently lay claim to being safe harbours. While Jersey has long ranked highly among individuals and families of great wealth, its reputation for stability and certainty has taken on further resonance for international clients when set against this tumultuous backdrop. Notably, tax is simply not the driver it once was and jurisdictions able to combine the requisite stable outlook with structuring flexibility and a deep pool of local expertise will be of particular demand. From a regulatory perspective, one way in which IFCs can evidence their stability credentials is through meeting the demands of international standard setters while not compromising their commercial or innovative advantages. In this regard, Jersey fairs particularly well having emerged positively from reviews by the IMF, Financial Action Task Force (FATF) and the OECD, to name but a few. The current climate is also resulting in greater emphasis on both family and corporate governance; the roles and responsibilities of key players and executives are being clearly outlined while succession planning and family charters are achieving a more homogeneous view of what the future should look like and how to achieve it. Of course, at volatile times, the need to adapt is also key – a fact that advisers operating from quality jurisdictions must be cognisant of. Jersey, however, has a long history of supporting the wealth management industry to help navigate such times while also having the cross-border capabilities and forward-thinking approach to help clients pivot in an evolving environment.
What conclusions can we draw from the recent MONEYVAL report on Jersey about the future for IFCs in the drive to effectively tackle financial crime?
The MONEYVAL assessment provides an important benchmark as to how a jurisdiction is meeting its claims of combatting financial crime and is indicative of the direction of travel towards ensuring all financial centres do not tolerate or support business activities which operate in an unscrupulous manner. The report published in October 2024 (almost a decade on from the island’s previous assessment), gratifyingly concludes that Jersey’s effectiveness in preventing financial crime is among the highest level found in jurisdictions evaluated around the world and that Jersey is one of only three jurisdictions globally with a ‘high’ rating for risk understanding andnational cooperation. The Island also received no low ratings from the MONEYVAL assessment and was commended for its approach to beneficial ownership, its legal framework and effective use of financial intelligence. It is a positive and welcome outcome following a two-year extensive review and engagement process but more than that, it sends a powerful message to investors around the world that they can be confident in Jersey’s current and future standing.
What are the milestones celebrated in Jersey this year relevant to the wealth management sector, especially when considering family office activity and philanthropic strategies?
Jersey has more than 60 years of experience delivering private wealth management whether that be via trusts, succession planning or supporting philanthropic endeavours. The Island’s standing in the sector, however, has not been reached by resting on its laurels and the collaborative approach taken between industry, regulator and government has ensured the jurisdiction remains relevant, especially when set against greater digital requirements and environmental concerns. Consequently, in terms of milestones, 2024 has been particularly significant as it marks 40 years since the introduction of the Jersey Trusts Law. Over the past four decades there have been a series of enhancements to ensure the law remains fit for purpose and meets the needs of a dynamic world of wealth creation and asset protection. This year industry again is being consulted to identify how to best continue meeting those needs. It’s also the 15th anniversary since the introduction of the Jersey Foundation, another key structure in wealth management strategies and 10 years since a Charities Law was added to the statute book. Meanwhile, 2024 has also been marked by changes to the UK tax rules for so called ‘non-doms’, which may prompt those benefitting from the arrangement to reconsider their residency situation or potentially exit to other jurisdictions. However, in actual fact and despite popular belief, the residency decisions of ultra-highnet-worth individuals and families are about more than just tax. Instead, stability, reputation, structure flexibility, cross-border capabilities and expertise have risen to the fore especially as the role of the next generation, geographically dispersed family members, the broadening of business activities, the diversification of investments, philanthropy, ESG and digital assets rise in influence. Technology and innovation, in particular, are only set to increase in significance with digital platforms and connectivity playing a key role in the minds of families and the fact that Jersey benefits from the fastest broadband speeds in the world is something not lost on those looking for an IFC partner. Consequently, when it comes to residency and wealth structuring, the increasingly global nature of family ambitions has moved the dial away from tax significantly. By combining substantive international capabilities and stability with an innovative mindset, jurisdictions like Jersey can complete an attractive part of the puzzle.
How important has the Trusts Jersey Law been to the long-term success of the jurisdiction as a leading location for family office and/ or philanthropic business?
The Trusts (Jersey) Law 1984 has truly been the bedrock underpinning the Island’s international appeal for the private wealth sector. The certainty of the Trust Law has embedded stability into the Island’s make-up, providing distinct appeal to high-net worth individuals and families residing or operating in jurisdictions with a less stable outlook. To maintain its ongoing appeal, the law is currently subject to a Government of Jersey consultation with five draft amendments being proposed – developed in consultation with a number of local, expert practitioners – and indicative of the continued commitment to ensuring the Island’s private wealth offering remains competitive and compelling. It is an approach that has meant Jersey has remained the leading IFC globally for the administration of trusts since the 1960s. And with structures like the Jersey Foundation offering flexibility for both charitable and non-charitable goals adding to that appeal, the Island is more than equipped to meet the philanthropic ambitions of the individuals and families it supports.
