Sponsored by Jersey Finance and first published in the June 2022 edition of African Business magazine, this special report explores why Jersey’s international finance centre is fast becoming the number one choice for South African Wealth Managers.
- An overview of South African wealth trends and data such as where South Africa’s wealthy live
- Expert insights and case studies from Jersey professionals and firms: Accuro, Alexander Forbes, Brooks MacDonald, Equiom, Innovest Advisory, IQ-EQ, Melville Douglas, Standard Bank, Standard Chartered, Stonehage Fleming and Quilter Cheviot
- Observations on the legal and regulatory technical developments in the region
- A fireside chat with Rob Hersov – a South African-born entrepreneur and investor
- Professional views on Jersey’s expertise in investing for sustainability and impact
- The future of financial services work in the region and Jersey’s enduring connections with South Africa
Jersey, first for South African Wealth Management
As Africa becomes increasingly economically and politically strategic in our fast changing world, the unbounded opportunities on the continent have led to increased prosperity and wealth. This is particularly so for South Africa, which is a key hub for the opportunities on the continent, with its deep financial services sector and developed city infrastructure and air links, writes Allan Wood, Global Head of Business Development, Jersey Finance.
Here in Jersey, we are proud of our long-standing relationship with South Africa. Over the past 30 years we have been helping ultra high net worth families diversify their investments, to ensure capital preservation and effective estate and succession planning. We are a specialist centre for supporting wealth management in South Africa, and also find that many South Africans who are internationally mobile have also made a home in Jersey.
We are seeing more and more that as people become more prosperous, they want to give back. Our recent work complements the increased emphasis on sustainable and impact investing, and we have specialist expertise in philanthropy and environmental social and governance (ESG) frameworks.
Further, our recent global value chains research report shows that Jersey’s deep financial services expertise, its respected regulatory framework and its robust legal system mean that our Island is a key location for pooling capital and for facilitating international trade and economic activity.
Jersey’s global economic footprint and its contribution to global value chains (GVCs) supported £170.3 billion of global GDP on average each year during the period studied, of which £6bn flowed to Africa. I am positive that we will see an increase in such activity and a continued strengthening in our relationships in South Africa and the wider continent.
The Jersey Proposition
Having worked in financial services for more than 21 years across Africa, I’ve noticed a growing interest from wealth management professionals seeking to diversify their client’s investment portfolios and work with international finance centres (or IFCs), such as Jersey, to achieve this.
In Africa, “wealth isn’t inherited, but made”, and entrepreneurship is the most common route used by Africans to create wealth. Interestingly, South African HNWIs share a common interest – the greatest portion of their estates are assigned to family. For them, it’s clear they will seek the ability to build generational wealth which relies on the ability to both create it and protect it – ambitions experts in Jersey’s IFC have delivered for private clients for more than 60 years, using structures such as trusts and foundations to manage, protect and grow assets. In fact, Jersey’s asset holding and trusts sector is by far the largest on-Island
in terms of assets; £1.14 trillion of capital is administered by Jersey firms.
Unsurprisingly, the political environment is a significant risk to wealth preservation for South African HNWIs, which can be seen as a good reason to explore offshore solutions to bolster and diversify their investment portfolios – allowing investors to benefit from a broader, global universe beyond what the South African market offers. Looking offshore can expand investment opportunities in long-term growth sectors, such as technology.
More so, diversifying helps to both optimise and decrease the risk of a portfolio. Diversification across nations, sectors and businesses, as well as asset classes and currencies, is a key advantage of offshore investment.
When considering the next generation of South African HNW families – with children who live beyond one ‘home’ jurisdiction – there’s an even stronger case for investors to seek offshore structuring solutions. Structures such as trusts can pool and secure wealth for future generations and investors will need a stable jurisdiction that offers certainty and stability to achieve this ambition. Jersey’s IFC is a clear frontrunner in this instance. The ecosystem of expertise, consisting of more than 13,600 financial services professionals experienced in providing private client services and with more than 40 firms already working with African clients.