BL Magazine Issue 48 January/February 2017

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predictions for 2017

Experts in finance, tourism, retail, technology and law give their views on the next 12 months

doing business with CHINA

It’s all about the long game when it comes to the Channel Islands gaining business from the East

non-executive directors

They’re playing an increasingly important role on boards – but just what makes a good NED?

welcome to donald’s world ISSUE 48 JANUARY/FEBRUARY 2017

what president trump means for investors



&CO IS IT ENOUGH TO BE THOROUGH? We don’t think so. Thorough is what you expect. Thorough is industry standard. At Carey Olsen, we view every instruction as a chance to surpass your expectations, to set new standards and reaffirm our position as leading offshore lawyers. We haven’t been just thorough for a very long time. We prefer meticulous.




2 july/august 2015


The theme for 2017? Strap yourself in… IN MAY OF last year, BL was going to print at the same time as the Great British public voted on probably the single most important issue in recent history. Because the referendum on EU membership was still too close to call, we designed two separate covers – one that reflected a vote for Brexit, and another which had nothing to do with the outcome at all, because a vote to remain effectively meant business as usual. As it turned out, we ran the startling image on the right as the cover. I commented at the time that, despite the closeness of the polls in the run-up to the vote, I never expected to have to use the image. But you never know how some things might turn out. Well, it’s pretty much Groundhog Day with this issue, because I certainly never expected to have an image of Donald Trump on the cover of BL. Let alone one of him as President of the most powerful (for now) country on the planet. If we’ve learned three things from last year they are: expect the unexpected; don’t trust the pollsters; and never, ever underestimate what people will do when they feel pissed off and disenfranchised. In the last issue of BL, before the US election, I finished my welcome message by saying ‘I, for one, would like to get through the rest of 2016 without any more surprises, thank you very much’. I’d like to add that it would be nice to get through 2017 with no surprises, but I hardly think that’s likely to happen. With elections to come in France, Italy in disarray and Lord knows what’s in store in the US, this year may turn out to be even more bizarre than the last. Who knows, between writing this in midDecember 2016 and the magazine hitting the streets in the new year, ‘The Donald’ may have decided that he doesn’t want the job at all, or the electoral colleges could have done the unthinkable and rejected him as President. Nothing seems beyond the realm of possibility right now – except for the fact that Trump will likely have hacked off a dozen more people/companies/countries/ dictators via his Twitter account. In light of all this surreal nonsense, it seems rather unfair that we asked a number of experts in Guernsey and Jersey to give their view on what was in store for the islands in 2017. Perhaps

unsurprisingly a lot of them commented on the air of uncertainty, primarily caused by Brexit, on the sectors they work in. And on that subject, there seems to be no end in sight right now – with legal challenges, Supreme Court rulings, likely more chicanery and even the possibility of a second referendum on the terms of the exit. Kudos, then, to our experts for sticking their heads above the parapet and giving their view on the coming 12 months in finance, tourism, retail, technology and Jersey and Guernsey law. I’m sure you’ll find their thoughts both insightful and illuminating. Not to get mired down in events in Europe and the US, we also look East in this issue, to see how the Channel Islands are progressing in doing business with China. We first examined the potential of the country in Issue 9 of what was then in June/July 2010. Not only was it fascinating to see what had changed since then, but it was also slightly weird to realise how far this magazine has come in those six and a half years. There’s no escaping the fact that 2017 is likely to be as monumental a year as 2016, both politically and economically. There are things that we know are coming – such as the Common Reporting Standard and changes to non-dom tax rules in the UK. But as for the rest, you may well want to buckle up – it’s likely to be a fascinating, and bumpy, ride. n

there’s no escaping the fact that 2017 is likely to be as monumental a year as 2016 was

Nick Kirby, Editor-in-Chief, BL magazine january/february 2017 3

WE HAVE EXPERTS IN YOUR AREA, IN YOUR AREA. With unrivalled local knowledge and experience, no-one understands the needs of the local market like we do. To speak to our Channel Islands team, call (01534) 282076.

The Royal Bank of Scotland International Limited trades in Jersey and Guernsey as Coutts & Co Channel Islands and as Coutts. The Royal Bank of Scotland International Limited. Registered Office: P.O. Box 64, Royal Bank House, 71 Bath Street, St. Helier, Jersey JE4 8PJ. Business address: 23-25 Broad Street, St. Helier, Jersey JE4 8ND. Regulated by the Jersey Financial Services Commission. Guernsey business address: P.O. Box 62, Royal Bank Place, 1 Glategny Esplanade, St. Peter Port, Guernsey GY1 4BQ. Regulated by the Guernsey Financial Services Commission and licensed under the Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002 and the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended. Calls may be recorded.




BL is published six times a year by Chameleon Group +44 1534 615886

62 bl guernsey


The latest financial and business news and views from the bailiwick

30 37 40 7 News A round-up of the latest Channel Island business news



12 Appointments Recent key appointments at firms in Guernsey and Jersey

16 Interview Mark Crowther, CEO of Liberation Group, pulls BL a pint and talks pubs, food and why increases in duty are a mistake

20 the insider view Ten experts give their predictions for 2017 across a number of finance sectors, as well as tourism, retail, technology and law in the Channel Islands

Finance 30 CHINA

46 non-executives

What progress have the Channel Islands made in the past six years doing business with China?

Just what makes a good NED, what do they actually do, and how does a newcomer get a NED position?

34 investing in the us

50 toxic workers

As Donald Trump becomes the new US President, what does this mean for investors?

We’ve all worked with a total nightmare, but what’s the best way to handle them?

37 cyber crime

54 productivity

Financial firms are under cyber attack, and life isn’t getting any easier

We’re swamped with productivity hacks and apps, but sometimes it’s best to just knuckle down

business 40 artificial intelligence We might not be overrun by robots, but AI will definitely change the world we live in

65 bl Jersey Changes to Jersey trust law, and the latest finance news stories


58 copywriting

The Agenda

How many people does it take to sign off a piece of copy? Sometimes it’s too many, and it’s the words that suffer

It’s red, red and more red as our lifestyle section comes over, well, very RED!

contributors The BL Global Discussion Forum


Follow us @blglobalnews Office: Floor One, Liberation Station, Esplanade, St Helier, Jersey JE2 3AS © Chameleon Group Limited, all rights reserved. Reproduction in whole or in part without written permission is prohibited. Views expressed by our contributors are their own and do not necessarily represent the views or policies of Chameleon Group. While every effort is made to achieve total accuracy, Chameleon Group cannot be held responsible for any errors or omissions.

It’s a double header for finance writer David, who has the unenviable task of assessing investing in the US in the age of ‘The Donald’, and why too many people involved in sign-off can spoil a piece of copy.


Just when he was hoping for a nice lunch and a fine merlot, business writer David realised that writing a piece about NEDs, just like being one, wasn’t going to be all about the perks – work had to be done.


Business writer Emma not only tackles the difficult issue of what to do if you work with someone ‘toxic’, she then debunks some of the more ridiculous tips that are meant to make us more productive.


Nearly seven years on from when he first wrote about the Channel Islands doing business with China, BL regular Dave revisits the subject and finds that ‘slow and steady’ has been the winning formula.

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Whether it’s an established company, a family business, an entrepreneurial start-up or the local arm of a larger operation, what businesses in the Channel Islands need to thrive in an ever-changing economy are trusted advisors who understand how to take advantage of opportunity, manage challenges and mitigate risk. Ogier’s local legal services team covers property, employment and regulatory law. We work with clients who are buying or selling a business, entering into a joint venture or restructuring, as well as advising on day to day issues from financing and corporate governance to contracts.

Local legal services Business and commercial law Competition law Dispute resolution Employment law Offshore relocations Planning and environment law Property and construction law Regulatory law Trusts Advisory Group Wills, probate and estate planning

in the NEWS Follow us @blglobalnews

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First speakers announced for Channel Islands NEDs Forum THE CHIEF EXECUTIVE of the

ICSA, the CEO of Deutsche Bank Channel Islands, and the Chair of Board Apprentice are just some of the speakers who are confirmed for BL Events’ forthcoming NEDs conference, ‘Life in the Hot Seat’. The event, aimed at nonexecutive directors in the Channel Islands, is produced in partnership with Deloitte and sponsored by JTC Group and Optimus Group. It will take place on 23 March 2017 at the Royal Yacht, St Helier, from 9am to 1pm. A host of experienced NEDs and senior executives have agreed to present sessions or sit on panels. Those who have so far confirmed attendance include: ● John Clacy, Partner, Deloitte ● Chris Clark, CEO, Prosperity 24.7 ● Rick Cudworth, UK Lead Partner for Resilience and Crisis Management Services, Deloitte ● Mark Dunster, Partner, Carey Olsen ● Phil Eyre, Owner, LifeThrive ● Norson Harris, Director, Zedra Trust Company ● Sara Johns, Partner, Ogier ● Gailina Liew, Non-Executive Director, Digital Jersey ● Peter Mills, Director, Optimus Group, and Chair, Guernsey NED Forum ● Adam Moorshead, MD, Guernsey, JTC Group ● Simon Osborne, Chief Executive, ICSA (pictured)

● Richard Sheath, Founder, Independent Audit ● Andreas Tautscher, CEO, Deutsche Bank Channel Islands ● Charlotte Valeur, independent NED, and Founder, Board Apprentice ● Paula Williams, Programmes Manager, GTA University Centre. Commenting on the speaker line-up, Helen Gale, Partner at Deloitte, said: “I’m delighted we have such excellent speakers for this forum, bringing with them specialist knowledge on a diverse range of topics. Expectations of NEDs are changing rapidly and it’s crucial that they are equipped with the highest level of skills and knowledge to perform this role. “This event, unique in the islands business calendar, will be a valuable opportunity to examine what the future holds for the NED landscape and how we can ready ourselves to remain competitive internationally as a NED community.” The running order for the day takes in a mix of sessions: ● A global NED perspective ● NEDs and the law ● Developing your NED skills ● Are you prepared for a crisis? ● Managing the board ● The NED of the future. Delegate places are available at £195. Places can be booked at – where the full running order can also be found. n

Intertrust completes rebranding of Elian FOLLOWING ITS ACQUISITION on

23 September, corporate services firm Elian has been rebranded as Intertrust. The acquisition and subsequent rebranding support Intertrust’s strategy of extending its expertise and global capabilities in response to increasingly complex client needs. The firm aims to expand its capital markets, private equity and real estate fund administration services offerings through the takeover. The acquisition has also expanded Intertrust’s geographical presence to jurisdictions such as Jersey, and added scale in other jurisdictions – Ireland, the UK and the Cayman Islands. With the addition of Elian, Intertrust now operates with more than 2,400 professionals in 41 offices across 30 countries. Commenting on the rebrand, Intertrust’s Chief Executive Officer, David de Buck, said: “The rebrand signals an important milestone in the integration of our businesses. It means we can move forward together, under one brand, with a shared focus on delivering high-quality service to our clients and business partners. “In Guernsey, Intertrust already has strong foundations and with the addition of the Jersey office, I’m looking forward to building on our service offering across both Channel Islands.” n


In the November/December 2016 issue of BL, in the article ‘The Middle East looks West’, we mistakenly stated that Qatar’s sovereign wealth fund owns The Shard building in London. The Shard, and London Bridge Quarter, are actually jointly owned by the Central Bank of Qatar and Sellar Property Group. We are happy to correct this error and apologise for any inconvenience caused. n

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BL launches inaugural Jersey Private Client Conference BL EVENTS HAS announced the schedule for its first Jersey Private Client Conference, ‘A Brave New World’, produced in partnership with Zedra and sponsored by Benest Corbett Renouf and Optimus Group. The conference will take place from 9am-3.15pm on Thursday 25 May 2017 at the Royal Yacht, St Helier, bringing together leading practitioners from Jersey and beyond to discuss the challenges, opportunities and issues dominating the private client space. Sessions will cover: ● The new face of the private client With the very nature of ‘family’ and the private client changing day by day, how must Jersey adapt and innovate in order to stay relevant? ● Alternative investments An examination of alternative asset classes and how they can be used in client portfolios – with a focus on P2P and crowdfunding/lending. ● High-net-worth divorce How are practitioners on both sides working to protect their clients/ensure a fair settlement is achieved? ● Trusts, tax and regulation The latest issues in these areas, including changes to the law in Jersey and beyond ● Technology How the Jersey private client industry needs to adapt and innovate if it is to stay competitive in the global market ● Philanthropy What are the trends in this area and how is philanthropy breaking new ground? ● Looking ahead Where’s the competition coming from, where are the big opportunities, what does Jersey need to do to capitalise on them? Delegate rate is £295, with discounts on multiple bookings. Five hours of CPD are also available. To book, go to or email Carl Methven at n

BSX and CISE sign agreement THE BERMUDA STOCK Exchange (BSX) and the Channel Islands Securities Exchange (CISE) have signed a Memorandum of Understanding (MoU) to enable them to explore opportunities to work together. The CISE is best known for listing investment vehicles, including open- and closed-ended fund structures, and international debt securities. BSX provides a fully electronic stock exchange platform to Bermuda’s domestic capital market. It is known for supporting the global reinsurance and capital markets through the listing of a variety of investment vehicles such

8 january/february 2017

as fund structures and insurancelinked securities. The MoU means the two exchanges will start to look into ways of working together, including the cross-fertilisation of regulatory best practice, information exchange in relation to market developments, potential resource sharing and joint promotional activities. Fiona Le Poidevin, Chief Executive Officer of the CISE, commented: “Our two exchanges differ in geographical location and market strengths, so there’s plenty of scope for each exchange to diversify its product range and broaden its international appeal.” n

Sanne has entered into an agreement to acquire International Finance Services and IFS Trustees. The transaction is set to complete in Q1 2017 following regulatory and shareholder approvals. The IFS Group is a Mauritius-based provider of fund and corporate administration services to corporates and alternative asset managers. Founded in 1993, it serves more than 1,000 global entities and has assets under administration in excess of $82bn. The group has a large revenue base across funds and corporate structures for investment into India and Africa. It has a largely institutional client base, with a high concentration of assets under administration funded from the US or the Cayman Islands. The IFS Group will form the core of a standalone division operating as Sanne’s new emerging markets-focused platform. Sanne’s management team will work with the IFS Group’s management team (who will remain unchanged post-acquisition) to integrate staff, clients and systems into the Sanne operating model. Jersey-based trust company Dominion has acquired Oak International Fiduciary – which formerly comprised the Swiss trust companies of the Royal Bank of Canada and Coutts UK Private Bank. This is Dominion’s second acquisition in 10 months, following the purchase of WPS, Mirabaud’s former Trust Company, in December 2015. Dominion, which was established in 2001, has offices in Geneva, Jersey, London, New York and Malta and provides solutions in private wealth, pensions and trust and corporate services from within Europe, the US and the UK. Specialist law and asset management services business MJ Hudson has completed two acquisitions – of investment advisory firm Allenbridge and outsourced fund management provider Tower Gate Capital. Allenbridge advises pension funds and other institutional investors on issues of asset allocation, manager selection and investment governance, as well as providing portfolio construction, due diligence services, fund ratings and risk analysis. Tower Gate Capital, which is authorised in London and Guernsey, co-manages 12 funds with a closing AUM of more than £2bn. It also provides regulatory and compliance solutions to managers and advisers. While the Allenbridge name will continue, all of the services provided by Tower Gate Capital and Allenbridge can now be accessed under the MJ Hudson brand. n



Only when we look back can we see just how far we have travelled. A lot has changed since Louvre Group opened its first office in Guernsey in 1976. Over the last 40 years, Louvre Group has grown to become a multi-faceted, international financial services company. The group now provides international wealth structuring, fund administration and family office services from seven important finance centres in Europe, the Middle East, Americas and Asia. Our ongoing and continued development in people, training and client experiences has ensured we continue to be a forward-thinking organisation, even if we pause to look back from time to time.

Our Locations Guernsey Dubai Switzerland Cayman Islands United Kingdom Hong Kong BVI

Four decades of experience. A generation of knowledge. Contact Siobhan Nicolle, Head of Business Development on +44 1481 727249 or email Louvre Group, St Peter’s House, Le Bordage, St Peter Port, Guernsey GY1 1BR.


XXXX november/december 2016 9 xxxxxx


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Monterey Insight highlights Channel Island funds NEW FINDINGS FROM independent fund research company Monterey Insight have revealed the market share of service providers in the Guernsey and Jersey funds industry. Fund assets serviced in Jersey reached US$301.3bn at the end of June 2016, up two per cent from 2015. The number of serviced schemes rose to 1,162 and the total number of sub-funds to 1,662 (1,120 and 1,559 respectively in 2015). For fund administration services across domiciled and non-domiciled funds, positions have been reversed, with Aztec Group taking first place with $57.9bn in assets, followed by State Street with $31.5bn and Saltgate ($31.2bn) maintaining its third position. Among domiciled and non-domiciled funds, BNP Paribas maintains first position as the largest custodian ($26.1bn in assets), with JP Morgan staying at second with $11.6bn, and Capita Trust Company moving up a place to third with $8.6bn. Mourant Ozannes maintains its law firm lead, advising on 836 funds, followed by Carey Olsen (486) and Ogier (327). PwC also remains as lead auditor with 492 funds, ahead of KPMG and EY, with 279 and 176 funds respectively. Among fund management companies,

for the first time ETF Securities takes the top spot of Jersey-domiciled schemes, with $15.9bn of assets, followed by BlackRock Financial Management ($14.0bn) and CVC Capital Partners ($13.5bn). Fund assets serviced in Guernsey stood at $385.7bn at the end of June 2016, down 2.5 per cent on the previous year. The number of serviced schemes increased to 990 and the total number of sub-funds fell to 1,317 (from 979 and 1,346 respectively). For fund administration services of domiciled and non-domiciled funds, Northern Trust remains the largest by total net assets ($61.9bn), with Ipes ($44.8bn) and Apax Partners ($38.0bn) following. Northern Trust also maintains its lead of funds under custody services of domiciled and non-domiciled funds with $18.5bn, followed by Kleinwort Benson ($8.8bn) and BNP Paribas Securities ($6.8bn). Among legal advisers, Carey Olsen offered legal advice to 670 funds, followed by Mourant Ozannes (238) and Ogier. As for auditors, PwC is auditing 361 funds, just ahead of KPMG (328) and Deloitte. Among fund management companies, the largest fund promoter for funds serviced in Guernsey is Apax Partners ($39.0bn), followed by Partners Group and Cinven with $22.7bn and $20.9bn respectively. n

Carey Olsen opens Hong Kong office LAW FIRM CAREY Olsen has opened an office

in Hong Kong, specialising in dispute resolution and insolvency. Partner Michael Makridakis is relocating there from the firm’s Cayman Islands office, where he established and led the dispute resolution and insolvency team. The new office will advise on contentious, semi-contentious and offshore advisory work. This will include domestic and international restructuring and insolvency, corporate and commercial disputes, banking and financial services litigation, trusts litigation, fraud, asset tracing and regulatory disputes. n

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Done Deals Fiduciary and administration services provider Estera has been involved in reportedly the largest property transaction to complete following the UK’s Brexit announcement in June. The group’s Jersey real estate team acted as majority director for BL Development – an investment vehicle controlled by Abu Dhabi Financial Group (ADFG) based in Abu Dhabi – on its acquisition of New Scotland Yard in London for £370 million, which completed on 1 November. The intention is to develop the site, which will be named The Broadway. It is scheduled to complete in 2021, providing 485,000 sq ft of residential space, 146,000 sq ft of commercial space and 37,500 sq ft of retail. Estera Director Brendan Dowling led the team and was supported by Group Manager Niamh Fountaine and Senior Client Managers Kirstie Le Feuvre and Ginette Fullerton. Ogier has acted for Golden Rock Global (GRG), a special-purpose acquisition company (SPAC) incorporated in Jersey, to undertake acquisitions of target companies or businesses in the fintech sector in Australia, Europe and North America. On 31 October, GRG was admitted to the Standard Listing segment of the Official List of the UK Listing Authority and to trading on the Main Market of the London Stock Exchange. The listing is expected to boost GRG’s profile and provide financial and operational flexibility to allow its directors to carry out the company’s acquisition policy. Ogier Group Partner Simon Dinning led the Ogier team, advising GRG as to matters of Jersey law, assisted by Senior Associate Alexander Curry. n


Expertly placed to administer and structure private and commercial wealth. We are an award-winning and independent provider of corporate, private client and fund administration services, trusted by our clients to provide the best service and solutions. Today we have 220 professionals working across Europe, Asia and the Caribbean. We are large enough to provide flexibility and breadth of expertise, but small enough to remain agile and personal.

Contact us: T +44 1534 740000 W

Jersey Hawksford, 15 Esplanade, St Helier, Jersey, JE1 1RB, Channel Islands. Jersey | British Virgin Islands | Cayman Islands | Hong Kong | New Zealand | Singapore | UAE Hawksford comprises a number of companies operating in multiple jurisdictions; for further information regarding these entities, and their regulated status, please visit


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Mourant Ozannes has appointed trusts and private client lawyer Fred Milner as Counsel in its International Trusts & Private Client practice in Jersey. Fred has a broad range of private client experience gained in London, Jersey and Geneva. Having worked in private practice and in-house, he advises trustees, family offices, law and accounting firms, private banks and high-net-worth individuals on a range of trust, corporate and succession issues as well as associated regulatory law. Fred previously spent three years working for Zedra in Geneva, and as Chief Executive, Private Clients, for Carey Group.

Ravenscroft has appointed Garry Beardshall as Treasury Manager, with responsibility for Jersey and Guernsey. Garry has 30 years’ treasury experience working for financial institutions, covering cash and derivative products. He moves to the company from hedge fund specialist Brevan Howard, where he was Head of Treasury. In his new role, he will oversee treasury, manage client cash held by the group and ensure the optimisation and risk diversification of that cash. Prior to working at Brevan Howard, Garry spent 12 years as Treasurer at BNP Paribas in Jersey.

Craig Cordle has joined Ogier as a Group Partner based in the Guernsey investment funds team. Craig comes to the law firm from London-based Norton Rose Fulbright, where he was a Senior Associate. Before this he spent 10 years in a similar role at Herbert Smith Freehills, also in London. His appointment brings the size of the partnership to 53. Ogier Guernsey Practice Partner, Advocate Marcus Leese, welcomed Craig’s expertise in structuring, establishing and restructuring investment funds, as well as listing investment vehicles.

Glyn Smith has been appointed to the board of Rossborough Insurance Guernsey as a Director, having joined the Channel Islands and Isle of Man insurance broker as Commercial Manager in March last year. With 39 years in the insurance sector in Guernsey behind him, Glyn joined Rossborough after having served almost six years as Managing Director of the Insurance Corporation of the Channel Islands. Prior to this, he spent several years working within insurance management for both Heath Lambert and HSBC.

Standard Chartered Jersey has appointed Adam Buxton as Head of Wealth Intermediaries. He brings more than 30 years’ experience in banking to the new job, in which he will lead a team of relationship managers in diversifying the company’s offering to wealth intermediaries in the Channel Islands, as well as in the Isle of Man and the UK. Adam previously spent 19 years with Deutsche Bank as Director, Relationship Manager Financial Intermediaries, prior to which he served as Client Delivery Manager for HSBC Jersey.

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HSBC Bank has made two appointments to its corporate banking and retail banking divisions in Guernsey: Sally Spencer (pictured) as Head of Corporate Banking and Mhairi Thomsett as Head of Retail Banking. Sally has worked with the bank for 30 years. She moves to Guernsey from the UK, where she was Head of Corporate, West London. Also moving to Guernsey, Mhairi assumes responsibility for the bank’s retail banking business and branch network in Guernsey, Sark and Alderney. She has spent 16 years in the UK with HSBC, most recently as Senior Retail Branch Manager in Cambridge.

Angus Taylor has been named Chief Executive Officer at Moore Stephens (Jersey), the new holding company for all Moore Stephens businesses on Jersey. An experienced wealth management professional, Angus has run banking, investment, fund and trust businesses in multiple jurisdictions. He was previously Managing Director of Kleinwort Benson and a Director at JTC and specialises in change management. Angus will combine his new duties with his existing role as Managing Director of one of the subsidiary businesses, Moore Stephens Trust and Corporate Services.

Fiduciary services firm Volaw has appointed Mark Hucker as Managing Director. He takes over from Robert Christensen, who spent 34 years in the role. Mark’s career in Jersey has taken in accountancy at Deloitte & Touche, moving on to fund and investment management at Perpetual (now part of Invesco) and then Ermitage Asset Management, where he eventually became Managing Director for Strategy and Operations. He joins Volaw from Standard Bank Offshore Group, where he has served as Chief Executive covering Jersey, Isle of Man and Mauritius for almost five years.

Corporate, private client and funds services business Hawksford has appointed Michel van Leeuwen as its Group Chief Executive, based in Jersey. Prior to joining Hawksford, Michel spent five years as Group Chief Executive of London-based Cordium, a provider of regulatory compliance consulting services to the asset management and securities industry. In addition, he has served as Managing Director of Microsoft’s Worldwide Capital Markets, as well as Partner for London-based Hammock Investments.

BDO Jersey has appointed Phil Ruelle as Chief Digital Officer. He joins from business change specialist Greenlight, where he was Chief Operating Officer. Last year Greenlight formed an integrated professional services firm with BDO Jersey and Sator Regulatory Consulting. Phil will work on bringing about digital transformations across the firm. With a background in computer systems engineering, Phil started his career in software research and development. He has held a number of management roles, including Director of Technology at Jersey-based hedge fund Altis Partners. january/february 2017 13

A BL event guernsey Trusts Conference 2017

Where disruption

In partnership with:

Sponsored by:

Places can be booked by visiting or emailing

meets opportunity Expect thought-provoking sessions on a range of current trusts issues: • Is the clock ticking on trusts? • Game-changing cases that are shaping trust law • Fraud and financial abuse of the vulnerable • Cross-border trust issues • Taxation and trusts update • What fintech means for the industry • The changing global family and how it affects trusts • Is it time for evolution or revolution?

wednesday 1 march 9am-3.30pm Duke of Richmond Hotel, Guernsey 5 Hours CPD available Delegate rate: £395 (+ 5% GST if applicable)



interview Mark Crowther

As the chief executive of Liberation Group, Mark Crowther has seen the pubs industry undergo significant change in the Channel Islands, the UK and Europe. So what comes next, both for his business and the sector in general? 16 january/february 2017


Your previous experience focused on the UK and Europe – how does the Channel Islands’ more compact market compare? That was part of the appeal. When I was putting together the business plan, I based myself in the islands and visited all 65 pubs three or four times each. I basically compiled 65 mini-business plans – whether they should be managed or tenanted, if there should be a food offering or accommodation, and so on. That gave me a really good insight into island life and the cultural differences between having pubs in Alderney, Guernsey and Jersey, plus we supply Sark and Herm as well. I found it fascinating and liked the fact that it was a tight geography – it felt like you could really get under the skin of the business. It also gave us the chance to get to know our tenants – we know all our managers and many of the staff because we’re in and out of the sites all the time.

Words: Nick Kirby Pictures: Glen Perotte How did you get to where you are now? One half of my working life has been spent running big groups of pubs and restaurants, and the other half involved with drinks businesses. I started life as a graduate trainee with Allied Domecq and ended up running a group of 150 managed pubs around London. I also had a year running big branded restaurants in Germany and Paris. Then I moved over to the drinks side, joining Guinness, which became Diageo. For the last couple of years there, I was based in Paris and running northern Europe – markets like Austria, Switzerland and the Benelux, up to Iceland. More recently I was the on-trade MD running all of Carlsberg UK’s operations. Approaching my late 30s, I was keen to have a slice of the action, so I was looking to lead buyouts for a couple of other businesses when what is now Liberation Group came on my radar. At the time, the business was CI Traders, which had been

In September last year, Liberation was acquired by Caledonia Investments – what was the purpose of the buyout? As with any private equity backing, we knew LGV would want to offload its shareholding but, as the Liberation management team, we were keen to stick with the business and go again because we really enjoy it and had a strong plan for the next chapter. If we’d just kept the Channel Island business, however, I don’t think there’d have been a strong enough growth story to have secured another financial backer. So when we were talking to potential backers, including Caledonia, I said our vision was to take the business and expand into the UK mainland – which is why we bought Butcombe nearly two years ago. Butcombe is a great business, with the brewery and initial 19 pubs around the Bristol and Bath area, and it gave us a great platform. In the course of the last year, LGV had a sale process and Caledonia was the successful party. We were delighted with that, as they were our number one choice out of the seven original bidders. So basically, we’ve rolled money into the new company and gone again. The same management shareholders are shareholders in the new company – but we have Caledonia as our major shareholder and backer. So is expansion off-island going to be your main focus in terms of growth? The Channel Islands will always be a major part of our business, and if the right

opportunities come up, we’ll absolutely be spending money in the islands as well. I don’t want people to think we’ve ‘switched off’ the Channel Islands – we’re a Jersey company and this is where our home and DNA is. But we want to double the business again in the next five years, which is what we did under LGV. To do that, we need to make further acquisitions – so we’re going to be focusing on the West Country to achieve that. We expect the growth to come through acquiring managed pubs and tenanted pubs and growing the drinks business as well as developing the Butcombe beer brand and some complementary brands and services around that part of the business. Do you have any intention to branch out beyond that – into hotels, for instance? Rooms are definitely on our radar – we have several pubs with rooms already and acquisition opportunities will include adding rooms to the pubs we’re buying. A pub with really good-quality boutique rooms is an area of interest to us. They cost a lot in capital expenditure to set up, but they can be really profitable once they’re up and running. Liberation has successfully branched out beyond the Channel Islands. Do you think that other businesses struggle to expand outside the islands – and can that limit ambition? What you can’t do is imagine you can stay sitting in Jersey, looking across the sea, thinking ‘right, we’re going to do this and were going to buy that’. We’ve got management teams on the ground in the West Country – I actually live in Bath myself – so I think a physical presence and being out there and making it happen is the key part of this. It’s what some island law firms and finance firms have done in the Middle East and Far East. Just because you have a good business in the Channel Islands doesn’t mean that you’ll have a good business elsewhere – like anything in business, you have to get out there and work hard at it. The pub game is changing dramatically. Do you feel traditional pubs are falling by the wayside and having a food offering is almost a pre-requisite these days? I’d agree it’s not the same as it was 10 years ago. There are lots of demands on people’s time and money – it’s not just that there are fewer drinking pubs, but that there are coffee shops, social media and other demands too. With our managed estate, we’ve grown the food as a percentage of turnover from around 22 per cent when we bought the business to approaching 45 per cent now – and that probably drives another 25-30 per cent of drinks that are associated with food. That’s very different from where the january/february 2017 17

bought by Sandpiper. They’d decided to focus on their retail business, so had put 65 pubs on the market, along with two wholesale businesses and the brewery in Jersey. I worked with LGV Capital on the deal, we acquired the business in 2008, called it Liberation Group and off we went.

Interview business was when we bought it. Having said that, I don’t believe that a good wetled pub’s days are over. Pubs were always seen as the heart of the community – but with the traditional pub in decline, is that now an outdated stereotype? I’d agree that maybe there aren’t as many community pubs as there used to be, but I can think of pubs in St Helier that you can go into at any time of day or evening and you’ve got people from all walks of life who meet there on a regular basis. There are many great examples of traditional pubs and I believe they still have an important role to play in communities. Is it simply too expensive to go out to pubs these days? A pub offers much more than just a source of alcohol – it can be community, friendship, food, watching the football with your mates. People may go out less frequently, but going out to a pub is very much an affordable luxury. If your sole reason is to get alcohol as cheaply as possible, you’ll get a mate to bring you a bottle of vodka back from duty-free. But if you want to go out because you want to socialise with other people, you can only get that by going to a pub. Do you think that craft beers and trendy brands such as Brewdog are good or bad for the industry? I think they’re good, because one thing the whole craft beer scene has done is to raise the profile of beer. People are really fascinated by beer now, the different flavours and styles, and beer matching. If every pub sold Carling, as much as it’s our number one brand, that would be quite boring. If you can bring in some vibrancy and interest, then there’s nothing wrong with that.

What’s your view on the above-inflation proposed increase in alcohol duty in the Jersey 2017 budget? It’s just disappointing really. Both Guernsey and Jersey are proposing five per cent increases on alcohol [at the time of writing]. What I find frustrating is that there’s no engagement from politicians around these issues. The Jersey decision came completely out of the blue and is allegedly targeted at reducing alcohol consumption, but that’s been happening already. The Jersey Health Profile 2016 says drinking in Jersey has dropped by 3.5 litres per head from 2005 to 2015, with islanders now consuming an average of 11.5 litres of pure alcohol a year. Bear in mind that we pay millions of pounds a year to the States in alcohol duty, yet Alan Maclean [Minister for Treasury and Resources] didn’t have the courtesy to meet us for a coffee and say ‘this is what I’m thinking, let’s discuss it’. It’s a blunt instrument and they haven’t thought about the ramifications. Look at the investments we’ve made recently – the Old Court House or The Square in Jersey. They’re both investments that are north of £1 million and create value for the economy and for employment. And yet this is what we get in return. The reality is that we’ve got choices now – so when we’re looking at where to put our investment, do we invest in Jersey or Guernsey or do we go to the UK where they’re reducing beer duty, for example? Beer duty in the UK is cheaper than Jersey now – Jersey has one of the highest duty rates in the world on alcohol, which is quite bizarre. The politicians talk on the one hand about how hospitality is really important to the visitor economy, and then on the other they say: “We’re going to stuff alcohol duty up five per cent”. It all seems very disjointed.

In a recent article in BL, Malcolm Lewis at Longueville Manor said that hospitality isn’t seen as a legitimate career choice. Do you think pubs suffer from the same perception? Nearly half of our employees are 25 or under. We’re a fantastic source of opportunities for young people, gaining experience of working with the public and having responsibility. Pubs and drinks businesses can be a lifelong career and you can travel worldwide, as I have. I do share Malcolm’s view though – it can be seen as a second-rate career, or something you do while you’re waiting for a ‘proper’ job, which I think is a great shame. We’ve got managers in their 20s who are running businesses that make £300,000-£400,000 profit. Those are big businesses with teams of 20 or 30 staff. These are multi-faceted, hands-on jobs that can develop you into a fantastic leader. And finally, what plans do you have for Liberation in the next couple of years? We’re working with Caledonia to look to double the size of the business over the next five years. Caledonia has ring-fenced £40 million of equity and a similar amount from our banks – so that’s around £80 million of firepower to grow the business. As I’ve mentioned, the main focus will be on the West Country. We’ll look at acquiring sites in Exeter, Hampshire and up through the Cotswolds. We already have a strong beer brand and we’re going to invest in that through sponsorship deals and by refreshing the brand imagery. That said, the Channel Islands are still a very important part of our business. Though most of our investment will probably be away from the islands, we’re not switching them off – this is still our home and still our base. n NICK KIRBY is Editor-in-Chief of BL magazine

FACT FILE Name: Mark Crowther Age: 48 Position: CEO, Liberation Group Married to: Emma Children: Amelia, Noah and Harry Hobbies: Family, cooking, French house, Bath rugby, Arsenal FC Interesting fact: I had a holiday job as a student working as Father Christmas at Debenhams in Cambridge

18 january/february 2017


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The insider view: predictions for 2017

Having consigned 2016 happily to the past, our experts take a look across a broad range of sectors to assess what might happen in the coming year

Funds JAMES ORRICK, MD, PRIVATE EQUITY ADMINISTRATORS, GUERNSEY “I try not to get involved in the business of prediction. It’s a quick way to look like an idiot.” So said British author Warren Ellis. The final months of 2016 were particularly interesting, with the UK in a constitutional crisis and potential civil disorder in the US. Whether the UK Parliament will vote against invoking Article 50 is unknown. The future beyond Brexit is hazy. The fallout from the newly elected Trump presidency is just unfolding. All of this might seem to place Warren Ellis’s thoughts on future-gazing firmly in the ‘too true’ pile. Nonetheless, plan for the future we must, so here are a few predictions for how 2017 may unfold for the Channel Islands’ funds industries.

REGULATION IS HERE TO STAY Whether we’re talking about the potential outcomes of MiFID II and MiFIR, the impact of BEPs, the OECD’s Common Reporting Standard (CRS), or the final implementation of AIFMD passporting, 2016 saw regulation becoming the industry norm. The funds industry should continue

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When it comes to BEPs, our message that Jersey and Guernsey weren’t its source must be pronounced. We are actively engaged in its development as part of the 101 countries that have signed up for the reporting – meanwhile, competitors such as the BVI and Cayman have yet to do so. And overall, while we must be at the forefront of the latest disclosures, we must take care when deciding what's in the public interest versus what’s interesting to the public.

NEW MEANING FOR ‘FLIGHT TO QUALITY’ to meet these requirements efficiently and with agility, so embracing technology in 2017 is a must. Over the past 12 months, the fintech and regtech industries have hatched solutions to evolving reporting requirements, which are enabling fund administration outfits to remain competitive globally. What's interesting is seeing where the regulators sit with this evolving environment. Guernsey’s new manager-led product (MLP) and Private Investment Fund (PIF) and Jersey’s incoming JRAIF and Very Private Placement Fund are strong examples of new product developments that are responding to industry demand.

The emphasis on factors that define the safety or quality for which Jersey and Guernsey are known will shift slightly in 2017. For years, we have pointed to our highly regulated, expert and professional offerings and laws that shape our funds industries, as well as to our political stability. But 2016 saw a shift in investor decision-making that will become more entrenched in 2017. Yes, fund performance remains a core factor. However, the quality of reporting, risk management considerations and appropriate policies and procedures are areas that investors question. Our talent and expertise are critical USPs. Make no mistake, our


highly-skilled gatekeepers have a role in determining a fund’s success and the manager’s ability to raise successor funds. In the evolving regulatory climate, you choose a jurisdiction with poor-quality personnel at your peril. Continuing to draw talent, whether home-grown or from beyond our shores, will bolster our substance. Our political stability might not have appeared so unique at the beginning of 2016. With the onset of 2017 heralding a refreshed UK government, Brexit and the new Republican US President, there is strength in our stability. There is also strength in the close accessibility of our government representatives, which enables change to happen quickly when it’s needed. While the Panama scandal placed pressure on Guernsey and Jersey, the detail revealed our strengths and substance. Our high levels of efficient and transparent regulation can ably assist with fund migrations out of jurisdictions that are defending money-laundering, tax evasion and poor transparency accusations.

IN WITH THE NEW Meanwhile, this potentially unpredictable financial landscape will see ongoing growth in private equity across the islands in 2017. Pointing to its very nature as an ‘investment style’ as opposed to being a certain asset type in itself, a recent Palico survey of 106 limited partners suggests that 70 per cent of PE investors will increase their 2016 allocation relative to other investments, demonstrating PE as an ever-popular vehicle. As this industry’s strong rapport with the diverse product offering and flexibility that’s available in Guernsey and Jersey looks set to remain, 2017 looks like being another strong year. n

DEREK BAUDAINS, CEO, LOUVRE GROUP, GUERNSEY This year, the aftermath of the Brexit vote and the American election result will inevitably bring changes at a macroeconomic level, and the ripples of change and general uncertainty will affect investor confidence. It’s generally agreed that the creation of wealth is slowing, with wealth generation threatened by taxes and global economics. Succession planning and protection are top of the agenda for ultra-high-net-worth individuals (UHNWIs) and we will also see philanthropic activities increasing, which is good news for the Channel Islands’ financial services industries. South and East Asia and Africa remain the areas with fastest growing wealth – these are prime markets for 2017. While there will be an economic slowdown in China, they still forecast growth of around six per cent. We also believe that Chinese demand for investing in overseas assets will grow significantly in 2017 as the weakening yuan prompts the wealthy Chinese to diversify. If Trump pulls America out of the Trans-Pacific Partnership, Asian countries are likely to look increasingly towards Europe and the UK as friendly nations, and finance jurisdictions such as Jersey and Guernsey could benefit. I believe China might abolish its exchange controls. If that happens there will be a flight of capital abroad, particularly into property. London will be a prime investment area. The benefits of using offshore structures to own investment property have decreased, but Channel Island banks will see increased interest for mortgage lending. High-net-worth clients and family offices are turning to the establishment of private trust companies and foundations to meet their demand for protecting their family assets in suitable structures where they can have a degree of influence over the investment opportunities. I think we will see this trend mirrored in the UAE as well, where we'll see more and more family offices being established and an increased level of sophistication in the wealth structures they are favouring. The reserved power trust has long been a popular choice for Asian clients and both Channel Islands offer this structure, with subtle differences to

choose from. However, with the Chinese love of property, the private trust company offered by both islands will really come into its own. The desire for effective philanthropic giving is increasing. Over the next year, we predict that the use of foundations and charitable trusts by family offices will increase. Jersey Finance has been promoting these services and attracting major enquiries over the previous 12 months, and Guernsey also has much to offer clients interested in impact investing, possibly through private funds. Brexit will encourage trade with the UK from non-EEC companies. This will provide opportunities for using offshore structures in the Channel Islands for tax planning and perhaps trade finance. The merchant banks, seen as a dying breed, were experts in this type of business, but there could be a rekindling of need for this service. Looking at the looming regulatory changes of the Common Reporting Standard (CRS), March 2017 will see the first reporting by financial institutions in early adopters – which includes both Channel Islands – and exchange of information will commence in 2017. For both islands, the impact of the CRS rules on transparency will provide a level playing field for all international financial centres. Premier jurisdictions such as Switzerland and the Channel Islands have planned for the impact; other less wellknown jurisdictions lag behind. We need to capitalise on our market advantage. Our more intangible assets, such as the islands’ reputation and perceived expertise, must be developed and promoted to help us to differentiate our offering. Finally, we will see the need in the coming year for more innovation, as clients demand personal and real-time services, as well as more variety in the products and structures available. This could prove to be both a challenge and an opportunity for the islands. Traditionally Jersey and Guernsey have shown themselves to be agile and able to respond quickly to changing needs. Only time will tell how the islands can meet the changing needs of UHNWIs in the next 12 months. n

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Private wealth



Capital markets FIONA LE POIDEVIN, CEO, CHANNEL ISLANDS SECURITIES EXCHANGE If 2017 proves to be anything like as historic as 2016, then we’re in for one unpredictable ride. What Trump’s victory in the US presidential election and the vote for Brexit have prolonged is the period of uncertainty, which is what seems set to prevail during the next 12 months. In this environment, fundraising in the capital markets has been much more restricted. This has been especially the case on the London Stock Exchange (LSE), where there have been only a handful of initial public offerings (IPOs) during the past year. However, Guernsey and Jersey vehicles do remain the first choice among those establishing listed structures. There is also capital waiting in the wings to be invested in projects with exposure to alternative asset classes, such as peer-to-peer lending or fintech, and/or especially where that’s able to generate a stable income stream, such as property. The vote for Brexit and the subsequent exchange rate changes initially hit the UK property sector, with open-ended funds gating in a bid to stop investors redeeming. This follows a similar situation to the financial crisis, but in the Channel Islands we are now much more familiar with property – an illiquid asset – being held in closed-ended fund structures and real estate investment trusts (REITs). We have seen particular growth in the number of vehicles choosing to list on the CISE who are availing themselves of the UK REIT regime. This reflects the growing interest seen in property in recent months

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since the Brexit vote, as international investors, including sovereign wealth funds, seek to take advantage of the cheaper UK property market. Our regime has proved particularly attractive for REITs which have a small number of significant institutional investors and don’t require the same levels of liquidity offered by the LSE’s Main Market. However, there has been a recent trend towards the CISE also proving attractive to more widely held REITs, and today a quarter of all UK REITs are listed on our exchange. We are also seeing companies seeking to use the capital markets in different ways to raise funds. For example, there has been continued growth in the number of Main Market and AIM-quoted companies issuing convertible debt, rather than equity, as a more convenient and cost-effective method of attracting new capital. The low-interest-rate environment has also helped stoke the high-yield bond market, although this is looking more unpredictable in the face of interest rate pressures, particularly in the US. The CISE has seen the development of a new pipeline of business in high-yield bonds following the EU’s introduction of the Market Abuse Regulation. This has put in place a raft of obligations for securities traded on EU facilities that are disproportionately onerous on highyield bonds. As such, issuers who would have previously listed products on EU markets are increasingly using the CISE, where there are robust yet proportionate rules. We have been presented with this opportunity because of the fact that we are in Europe but outside the EU. This position already helps the Channel Islands to act as conduits for global capital flows, and now there's a chance for us to enhance that by supporting investment into a UK economy that's had its growth forecasts cut following the Brexit vote. n

NEIL MCCLUSKEY, HEAD OF CORPORATES, BARCLAYS, JERSEY By all accounts, 2016 was the year that defied prediction. Across the world the public has defied pollsters by voting for change, whereas corporates have been much more cautious. This is a trend that I think will continue through 2017. The public is keen to embrace change, particularly in the form of new technologies, but corporates are more reluctant, given the current global macro-economic uncertainty, to take on new challenges or risk in order to grow. This trend manifests itself in both retail and corporate banking. In retail, we must keep pace with our customers’ desire to pay for everything quickly, to have instant access to information about their finances and to do everything possible on their smartphone. In the UK, money spent by contactless customers has increased significantly in the past year, in part thanks to the increase in the limit from £20 to £30. What's perhaps more surprising is who is leading the charge in this spending. It’s not, as you might imagine, young people, who are traditionally more at home with new technology. The take-up of ‘touch and go’ continues to be highest among Britons over 60 – the 'silver spenders' – with the number of users up 114 per cent, more than any other age group. Usage is climbing so quickly in this group that the number using the technology is now greater than those aged 18-25. While the Channel Islands typically lag behind the UK in the uptake of services such as this, I predict that 2017 will be the year in which all businesses see the benefits of contactless banking technology, including the latest trend for payment options via wearables. In the corporate world, the pace of change is slower. My view is that in 2016 many corporates held onto what they had in the face of huge uncertainty. In the Channel Islands there has been uncertainty surrounding the impact of the

Tourism JULIA HANDS, CHAIRMAN AND CHIEF EXECUTIVE, HAND PICKED HOTELS What is the future for tourism in the Channel Islands in 2017? This year will be one of the most difficult to predict, in the face of unprecedented change worldwide. However, what is known is that the biggest challenge facing the UK, Channel Islands and Europe is Brexit. According to the Tourism Alliance, which represents all the major tourism bodies, as a result of the Brexit vote we will see a boom in staycations, generating an additional £2.4bn in revenue from tourism. A huge rise in visitors from abroad, driven by the falling pound, has already been experienced in the UK since the summer. Weak sterling has also made overseas holidays more expensive for Britons. One thing is certain in these uncertain times – the Channel Islands will continue to be an appealing haven for visitors. Both Jersey and Guernsey offer the best of both worlds – with all the emotional touchpoints of a staycation but with each of the islands offering its own character, influences and atmosphere. Tourism experts and operators, hoteliers and restaurateurs are working hard to capture these magical ingredients and promote them. Natural beauty, island-hopping, excellent seafood and local produce, stunning coastlines and beaches, heritage, flora and fauna and walking are the most common

reasons to visit the islands. Creative ideas are being used to package these attractions to appeal to new audiences, including young families and more affluent visitors from the UK and also from France and Germany and elsewhere in Europe, with the added incentive of the weak pound. Cruise liners are also providing an increasing number of day visitors, with a boost to visitor attractions, restaurants, bars and retail. It’s vital that the islands are able to deal with sudden influxes of tourists, with sufficient levels of public transport and taxis running to enable the visitors to explore the islands. Looking back, 2016 was mainly positive for tourism. Jersey reported the highest number of holidaymakers for more than a decade – 66,000 holidaymakers visited the island in the first three months of the year, the second year of a sustained increase in tourists in the off-peak season. Looking forward to this year, it’s good to see that Visit Guernsey and Visit Jersey have full programmes to drive visitors, highlighting reasons to visit, promoting food and literary festivals and events to reach special-interest audiences. They showcase the best the islands have to offer, as well as emphasising the potential from wellbeing, driving business tourism and encouraging the meetings and events industry to increase business on the islands. Indeed, for 2017, one of the most exciting opportunities for both islands is wellness tourism, which is predicted to grow by nine per cent and is worth more than £300bn globally. Activity breaks, healthy eating with local produce, spa offerings, and a safe and stress-free environment in a naturally beautiful setting, are already providing a focus of attention among operators on both Guernsey and Jersey. Business tourism also has great potential for the islands, with both offering great places for business awaydays and conferences for UK-based businesses, particularly with flights now available from more regional airports. Plans by the tourism bodies to target meetings and events operators could give hotels and restaurants a significant boost this year. n

january/february 2017 23

EU referendum result. However, as this uncertainty decreases in 2017, I predict that more businesses will actively seek finance for growth projects. As a result, we will see considerably more lending from banks as this demand increases. Last year there were further increases in the amount of deposits held in the Channel Islands – more than £209.7bn is currently held in the islands' banks. With 29 banks licensed in Guernsey and 32 in Jersey, the market is well served with options. If, as predicted, there is more appetite for growth from companies doing business in the islands, we will likely see the level of deposits continue to increase. Despite uncertainty in the global markets, the islands’ position as safe and secure jurisdictions should ensure that there isn’t a great deal of change in the number of banks present in the islands. There’s always the possibility that some banks will seek to consolidate their operations, as we have seen some do early last year. However, the trend I believe we will see become more prevalent is for banks to invest in the islands, including through job creation. This year will bring serious challenges too. Cybersecurity has been a growing threat to the global finance industry in recent years, and in 2017 it will become the primary threat to business. All businesses will need to address it and the banking sector is, in many ways, leading the field. I predict that we will see more attacks in 2017 and that these attacks will increase in sophistication. Preventing cyber fraud in 2017 will be a team effort. As information and finance is now primarily transferred digitally, everyone involved in your business, and across your supply chain, will need to be aware of the risks and the right ways to minimise them. Data security is one of the Channel Islands’ greatest assets. Any information leak could have an impact on the islands’ reputation in the eyes of international finance industry professionals and undermine one of our key selling points. It is for this reason that in 2017 we will see banks being more proactive in the business community, forming partnerships with government – and with organisations such as Digital Jersey and the Digital Greenhouse – to promote cyber fraud awareness and support entrepreneurs and businesses looking to grow, expand and diversify. These partnerships, such as the new Barclays Eagle Lab at the Jersey Library, will become hubs for entrepreneurship in the islands and give banks the opportunities to lend more and help our economies grow. n

Image courtesy of VisitGuernsey



24 january/february 2017

Image courtesy of VisitGuernsey

MARK COX, CHIEF OPERATING OFFICER, CHANNEL ISLANDS CO-OPERATIVE SOCIETY Looking ahead to 2017, what can we expect? After a period of flux with major political and economic events affecting both consumer and business confidence, it looks like we're facing a period of price inflation; goods are going to be more expensive and operating costs will rise. While the islands may have been protected from some issues surrounding Brexit, the drop in the value of sterling will be felt locally due to the impact of higher import costs in food and non-food sectors. Many of the major retailers will have hedged currency so the weakness in sterling will only begin to have an impact early this year. Proposed above-RPI increases in Jersey and Guernsey on alcohol, tobacco and fuel duty will have a further impact on disposable income levels. Increased fuel costs affect businesses as well, and the size of the increases will negatively impact operating costs. Yes, the lower interest rates might help as they may offset some of the inflationary pressures consumers face, but the continued focus on balancing the books on the islands, at the cost of the taxpayer, could well mean that any benefit is eroded. With both islands looking at how best to fund the growing cost of health services, we should expect to see continued consumer interest in health and wellness. The increased awareness of the cost, financial or otherwise, of our lifestyle choices is driving behaviour change and food retailers are well placed to help inform and educate shoppers. Customers will search out convenience more than ever – shopping more frequently instead of large weekly shops, and willing to shop around and top up as required. Retailers need to work hard to retain loyalty and capture a greater share of customers’ spend. Online and digital technologies also continue to grow and influence consumer choice locally. This isn’t going to change


and retailers will need to continue to invest in their offer to ensure it remains relevant. The traditional bricks and mortar store will remain important, but retailers will focus harder on creating more meaningful engagement. Customers are more empowered than ever and tend to be more impatient too, so creating theatre and offering experiences in store that can’t be replicated online will be important. Without doubt, shopping is becoming more 'social' – customers are talking about products, services and experiences all over the web. As retailers, we can’t just sit back and hope for positive feedback; we need to engage and provide up-to-date, relevant social content from which to inform decisions and choice. Comparing our high-street vacancy rates with similar towns in the UK, we still have a vibrant, compelling offer in our town centres, and we continue to punch above our weight in terms of the mix of local and chain store retailers available. Investment in Jersey’s high street is evident – De Gruchy and the Co-op will complete significant improvement projects in 2017. This demonstration of confidence can only be good for the islands. In Guernsey, there isn’t quite the same scale of opportunity, but recent moves by M&S Kids, iQ and Feelunique demonstrate that retailers are willing to invest to improve their offer. While we will still see growth from retail in 2017, it will remain challenging and retailers will need to consider carefully how ambitious their targets are. But it’s not all doom and gloom. Both islands have fantastic retail offers that exceed what would be available in similarsized market towns in the UK – though there's no room for complacency. Retailers that drive value, engage and interact well with customers and focus on delivering experiences that can’t be replicated elsewhere will enjoy a strong 2017. n

CYRILLE JOFFRE, CHIEF TECHNOLOGY AND INFORMATION OFFICER, SURE There's never been a better time to innovate – knowledge is a commodity and the adoption time for new technology is quicker than ever (it took just 60 days for PokemonGo to reach 100 million downloads). It’s relatively cheap to have a minimum viable product and as established companies still struggle with innovation, there's an opportunity for start-ups and entrepreneurs to lead the charge. Digital transformation is the top strategic priority for more than twothirds of companies, as revealed by the Economist Intelligence Unit (EIU) in 2016. According to industry analyst IDC, by the end of 2017 more than 70 per cent of the Global 500 will have dedicated digital innovation teams, with training focused on mobility, cloud application security and infrastructure as a service. In Guernsey, Digital Greenhouse, Locate Guernsey and other entities operate largely independently. At a Channel Islands level, Digital Jersey and the Digital Greenhouse should consider spearheading digital initiatives in a more coherent, comprehensive and coordinated fashion whenever possible to ensure they reach their full potential. Although technology has had a significant impact on many local business sectors, others, such as government, healthcare and education, remain relatively untouched. We expect to see an increase in strategic partnerships between policymakers, businesses and organisations supporting each other in order to scale opportunities. The islands’ digital initiatives have begun this work and we think that further collaboration is inevitable. This in turn will have benefits for local startups and entrepreneurs, as well as for established businesses. ● Low-cost sensors and microprocessors linked to the internet have created the Internet of Things (IoT). Research firm Gartner predicted in 2015 that IoT would consist of four billion connected devices



in 2016, and that this would climb to 20.8 billion by 2020. When things are connected, they become platforms for change, offering increasingly tangible benefits for businesses to enhance customer relationships and drive business growth. Consumers also benefit from the growing range of connected services, including wearable devices and the ‘smart home’, where smartphones and tablets interact with connected objects and devices, from lighting to basic security systems. In addition, some IoT projects will leverage ‘immersive interfaces’, including augmented reality (AR) and virtual reality (VR). An immersive user experience enables deeper workplace engagement and behaviour change. The principal challenge presented by IoT is the lack of consensus around the new technology, which has penalised Channel Island investment compared with other European countries. IoT devices require standards and protocols that are almost wholly distinctive and this lack of unity means the best way to deploy and monetise IoT is a bone of contention. A poll of 1,000 industry professionals revealed that 79 per cent recognised a lack of consensus on how best to use IoT. However, the Channel Islands’ size will be an advantage as the existing 4G coverage and the rapid rollout of IoT will help them to close the gap. IoT also presents opportunities in business intelligence. Organisations will demand analytical tools that seamlessly connect to and integrate cloud-hosted data. These tools enable businesses to explore any type of data and understand it quickly to make important decisions. ● Channel Island businesses and organisations need to develop new, secure ways of engaging with customers. With an increasing reliance on data for personalised content delivery, the risk of data leakage and malware and infected devices represent major challenges for businesses. Additionally, the upcoming NIS Directive (the first piece of EU-wide legislation on cybersecurity) will force many companies

26 january/february 2017

to re-evaluate their capabilities. Another challenge is the use of bulk data to build profiles, with the fundamental question being: who does it serve? Consumers want to share their data but only if the benefits and the privacy controls are right. As we become more empowered over the data collected about us, we may soon allow access only in return for value. Privacy policies such as GDPR (General Data Protection Regulation) will act like training wheels, helping the industry ride the personal data economy faster. Ideally, the Channel Islands should seek to develop a data protection and identity management framework that is both futureproof and flexible enough to allow the development of new services, while providing robust protection. The islands also need to act quickly to present themselves as the location of choice for high-value digital businesses, in particular across banking, funds and insurance sectors, where personal data offers pivotal opportunities. Given the diversity of possible applications (just check out Friendsurance, Metromile or Driveway in the insurance sector), we need to adopt a risk-based approach that recognises the context in which data is captured and used. For instance, it isn't always appropriate to ask for a consumer’s explicit consent to use data. An over-reliance on an explicit consent regime may create a high burden and lead to notice and choice fatigue, numbing people to the importance of making privacy decisions when it matters. n

Guernsey Law HANA PLSEK, ASSOCIATE, COLLAS CRILL, GUERNSEY Whilst 2016 saw a great deal of attention paid to global issues and how they will affect our island, in 2017 we will also need to look at changes closer to home. Some significant legal developments in Guernsey may have a major impact on our infrastructure and our workplaces. One of the biggest changes will be the new Population Management (Guernsey) Law 2016 (PML) and the Open Market Housing Register (Guernsey) Law 2016, which are effective from 3 April 2017. The PML was drafted with the States of Guernsey’s social, political and economic objectives in mind. With an ageing population and limited resources, current trends aren't sustainable. So what’s going to change? Guernsey’s two-tier system will remain, but with some tweaks. The most significant will be clarity on the time period needed

to obtain a right to remain on Guernsey. Having completed eight consecutive years of occupancy in a local market property, and upon expiry of a longterm employment permit, an individual can apply for an Established Resident Certificate, allowing them to reside in a local market property indefinitely without any employment-related restrictions. However, the individual won’t have a right to remain indefinitely in Guernsey. Should they leave for a ‘recognised break in residence’ (that being defined as an amount of time equal to or longer than their last period of residence in Guernsey), their right to stay will cease. This increased certainty will no doubt provide a degree of comfort to many local employers. Interestingly, the main source of controversy around the new law has stemmed from changes in the short-term employment permit. Previously, an individual was able to undertake work on a short-term basis for, say, a nine-month period, leave the island for three months and return again to undertake a further nine months. These individuals don’t accrue any rights to live on the island indefinitely as they must reside in Open Market accommodation. Thus, there was no long-term population growth attributable to these workers, employers didn’t need to regularly train staff and the gap in the employment market was plugged. Under the new regime, the maximum amount of time these individuals can stay is five years, with an application being required every year. In addition, any absence from the island could potentially count towards this five-year period if it isn’t a ‘recognised break in residence’ as defined above. In theory then, in our example above, any nine-month period would require an absence of nine months, rather than the three-month absence, to ensure the period isn’t taken into account towards the maximum of five years. Understandably, the hospitality and agricultural sectors, among others, are concerned. Finding new staff regularly isn’t cost-effective and the burden of the extra administration not helpful. Thankfully, the Housing Department

Finance has recognised these concerns and is working with local businesses to ensure that any worries are dealt with swiftly and with the States of Guernsey’s overall strategy in mind. In general, this new law provides an element of clarity that was previously lacking. However, misconceptions and misunderstandings have caused fear and upset among ex-pats and employers. Perhaps lessons can be learned in terms of education around new legislation. Alongside this, we have the changes to the Open Market Housing Register that will also come into effect. Much like the PML, there are a number of misconceptions around houses in multiple occupancy (HMOs), occupied by unrelated persons and what will happen to them. Although the Housing Department has done a good job of informing the public in a variety of ways of what the changes will mean to each individual, the interplay with planning issues has been less well highlighted. Whilst housing and development and planning have different obligations under differing legislation, one thing is clear: as far as HMOs are concerned, a joined-up approach is required for the benefit of the end user. It’s a shame that the powers that be have not, to date, clarified these points to the public as, for the man on the street, it would have simplified things considerably. It’s important that property owners fully understand the planning implications by taking advice now before properties are re-categorised in April. One last big change of significance to HR departments will be the introduction of same-sex marriage. On 21 September 2016, a bill was approved by the States of Guernsey (now awaiting Royal Assent by the Privy Council). The first marriages are expected to take place this year. Putting Guernsey in line with the likes of the UK and parts of America is another step in making sure our legislation reflects the modern world we live in. n

Jersey Law BARBARA CORBETT, PARTNER AND HEAD OF FAMILY LAW, AND JEAN-MARIE RENOUF, PARTNER, BENEST CORBETT RENOUF, JERSEY There is so much legislation these days, and so many cases in the Royal Court that interpret and reframe the laws that the States pass, that it’s very hard to provide any concrete predictions for what changes to the law will happen across the board. Most lawyers are specialists, so our predictions for

2017 concern family law, trusts law and employment law – our areas of expertise. Possibly the most significant and most likely change in family law in 2017 will be the introduction of equal marriage. This follows commitments made by the States to change the law to enable same-sex couples to marry during 2017. This is significant in one respect – it’s the first time gay couples will be able to marry in Jersey – although in some ways it may not change things a great deal. Although same-sex couples can’t marry now, they can enter into a civil partnership and so enjoy almost all the same rights of married couples, including when the relationship ends. The big difference is likely to be in the use of the term ‘marriage’ and a resulting feeling of equality rather than simply technical changes. However, the equal marriage legislation does present an opportunity to overhaul the law on divorce. The current law is outdated, it tries (and fails) to discourage divorce by putting obstacles in the way that cause unnecessary distress, upset and expense. No-one can divorce in Jersey until they have been married for at least three years. There’s no such limit in Guernsey. A marriage can be annulled if one of the parties suffers from epilepsy, an outrageously outdated concept – which wasn’t included in the Civil Partnership (Jersey) Law – and unless a couple have lived apart for at least a year, they can only get divorced if one of them blames the other. It’s not possible to make a joint application for divorce. There always have to be two opposing sides. This means people can be pitted against each other from the beginning, making it much more difficult to reach amicable agreements in respect of their children and finances. In our view, the introduction of equal marriage should be used as an opportunity to bring in ‘no fault’ divorce and to enshrine in legislation encouragement for couples to try to resolve differences between them through mediation and conciliation rather than the courts. Let’s hope the States will take that opportunity. It would also be good if, at the same time, the tax law could be changed to move away from married women having their income included in their husbands’ tax

returns and to be allowed to have a domicile other than simply that of their husbands. Those provisions are particularly outdated in Jersey, where so many women are the higher earners. Another aspect of family law which is in need of change is the law around assisted reproduction and surrogacy. It’s unlikely that there will be any changes in 2017 but currently there is no law at all in this developing area. There could do with being changes to the registration of births too. Following the Civil Partnership (Jersey) Law 2012, civil partners both have parental responsibility for their children, but unfortunately the registration law hasn’t been changed and only one mother and one father can be named on a birth certificate. There's a good chance that a change in this area will come during 2017. Trusts dominate much of our courts' time and represent one of the island’s most important industries. The Trusts (Jersey) Law, 1984, has been amended six times, and it’s likely a further set of amendments will be passed this year to deal with a number of issues, potentially including: ● Clarifying that there is no need for a beneficiary to exist at all times during the lifetime of a trust ● Redrafting the right of beneficiaries to information about ‘their’ trusts ● Confirming the ability of a settlor to reserve powers to themselves ● Allowing the Royal Court to vary a trust without the need for the consent of all adult beneficiaries ● Removing légitime, a rule of Jersey inheritance law, as a ground to challenge the transfer of assets to trustees by will. In employment law, discrimination has dominated the headlines in recent times, and this year we might see the further extension of the law to cover disability discrimination. However, this might be more likely to happen in 2018, given the particular complexities of this area. The 10th amendment to the Employment Law will, in contrast, definitely come into force this year, and bring in certain protections for armed forces reservists working within the Jersey Field Squadron. These will include: ● A right to return to a job after a period away with the forces ● Protection against unfair dismissal for reason of being a reservist ● Preserving continuity of (employment) service. Finally, the amendment also gives the tribunal the power to impose a fine – of up to four weeks’ wages – where an employer breaches certain requirements under the law, such as providing a statement of terms of employment. n

january/february 2017 27

A BL event

The Channel Islands NEDs Forum

life in THE HOT SEAT the must-attend event for neds in the islands

In partnership with:

Sponsored by:

A RANGE OF PANELS AND PLENARY SESSIONS WILL EXAMINE: A GLOBAL NED PERSPECTIVE • NEDS AND THE LAW • DEVELOPING YOUR NED SKILLS • ARE YOU PREPARED FOR A CRISIS? • MANAGING THE BOARD • THE NED OF THE FUTURE Confirmed speakers include: John Clacy, Partner, Deloitte • Chris Clark, CEO, Prosperity 24.7 • Rick Cudworth, UK Lead Partner for Resilience & Crisis Management Services, Deloitte • Mark Dunster, Partner, Carey Olsen • Phil Eyre, Owner, LifeThrive • Norson Harris, Director, Zedra Trust Company • Sara Johns, Partner, Ogier • Gailina Liew, NED, Digital Jersey • Peter Mills, Director, Optimus Group • Adam Moorshead, MD, Guernsey, JTC Group • Simon Osborne, Chief Executive, ICSA • Richard Sheath, Founder, Independent Audit • Andreas Tautscher, CEO, Deutsche Bank Channel Islands • Charlotte Valeur, Founder, Board Apprentice • Paula Williams, Programmes Manager, GTA University Centre

Thursday 23 March 2017 The Royal Yacht, st helier, Jersey 9am to 1pm 3.5 Hours CPD available DELEGATE RATE: £195 (+ 5% GST if applicable) Places can be booked by visiting or emailing


Chasing the

dragon The Channel Islands have long maintained the potential of doing business with China, but how have things progressed in recent years, and is that potential any closer to being realised?

SEVEN YEARS CAN feel like a lifetime

these days. Back in 2010, Donald Trump was merely the host of another reality TV show. The US version of The Apprentice was into season three and he was busy ‘firing’ female wrestler Maria Kanellis for the unsuitable tone of her banter. “This is my boardroom,” he told her. “It’s not a locker room.” How things have changed. But it seems not everything moves so fast. During that same year, BL (or as it was known at the time) set its sights on China, highlighting how the superpower could present a huge source of business for the Channel Islands. It made sense – China’s hungry economy was about to overtake Japan’s to become the second largest in the world; the country had an expanding middle class and an assembly line-like approach to producing new billionaires; and its massive sovereign wealth funds were busily brokering deals for natural resources in Africa, Kazakhstan and Venezuela. The only hurdles were the daunting cultural barriers and the country’s overwhelmingly protectionist bent. But if China was on a mission to go ‘global’, then the Channel Islands were

Words: Dave Waller

30 january/february 2017

equally bullish about getting involved. Rusal had just become the first Jerseyincorporated company to list on the Hong Kong Stock Exchange, and the Channel Islands were positioning themselves as the ideal partner for listings in London. Jersey Finance had recently set up a Chinese office, as had the likes of Ogier, Appleby and Vistra Trust, and they weren’t alone in realising that the mass of private wealth being generated in China had to go somewhere. Yet despite all the talk of opportunity, and those seven years having passed, still only one per cent of Guernsey’s funds business comes from China. Listings remain a low-volume business. And while Jersey managed £109.2bn of assets for Middle Eastern clients in 2014, according to Jersey Finance, that compared with a mere £13.3bn of assets for those from China. Even now the organisation’s CEO, Geoff Cook, still talks about China in terms of “potential”. “China is by no means our largest market,” he says, “but it’s growing quite quickly, and it will grow to become a very big market.” If that sounds like a case of a stuck

record, it’s worth noting that Cook’s sentiment is shared in Guernsey too. “China is never about short-term returns,” says Kate Clouston, Director of International Business Development at Guernsey Finance, which opened its representative office in Hong Kong early last year. “If that’s what you’re interested in, you shouldn’t go there. Guernsey Finance took a 20-year view. It began its investment in the Chinese office 10 years ago and it’s now reaching a tipping point and starting to pay off.”

ON THE FRONT LINE And there’s been plenty of concrete business. There are now 50 Jersey-based firms with a presence in Hong Kong, and a further 34 in mainland China. “Go back just a few years and that would be single figures,” says Cook. The islands have been busy building relationships, signing memoranda of understanding and spreading the word of their wares. Guernsey Finance hosted its own event in Shanghai last November, and the recent STEP Conference in Hong Kong saw Channel Islands delegations holding

masterclasses in their specialisms and, crucially, picking up work. But the action goes beyond loading up the Channel Islands’ caravan and cantering eastwards. China has been heading this way too. Guernsey has seen funds re-domiciling; Chinese companies listing on the Hong Kong Stock Exchange using Guernsey trust structures to hold their assets; and a Beijing-based company listing on the Channel Islands Securities Exchange. Clouston talks happily of recently hosting a Chinese family office on Guernsey, where they met local businesses with the aim of working together. Yet perhaps the most eye-catching Chinese deal of the year took place in Jersey – when Noah Wealth Management, a young and dynamic private wealth manager from mainland China, which has around $15bn of assets under management, set up a managed trust company with JTC Group. “Noah’s philosophy is that China is way behind in terms of the global mobility of wealth,” says Iain Johns, Head of Private Client Services at JTC. “Only 4.8 per cent of the assets of wealthy Chinese are january/february 2017 31





invested outside China; in Switzerland the equivalent is 39.5 per cent; in the UK it’s 42 per cent. “Noah president Kenny Lam says China’s total will double by 2020, and naturally the company wants to know how to help its clients to globalise, and how to use structures to help them – not just in wealth planning but the internationalisation of wealth and accessing other markets.” The result of the partnership is Ark Trust, founded in August, through which Noah can offer its 115,000 clients, most of whom are in mainland China, Jersey discretionary trusts – all approved by the JFSC and, crucially, all with the familiar Noah branding. According to Johns, Noah is the first Chinese wealth manager to offer its own offshore trust company. “They told us to expect to be approached by copycats – and we have been,” he says, alluding to other Chinese wealth managers seeking to stay in step with their clients’ demands for more sophisticated services. “I can’t over-emphasise the profile the deal’s had in China and Asia. And we have first-mover advantage in facilitating the release of this international mobility of wealth from mainland China into the global economy. This is the most compelling link between Jersey and China we could have hoped for. It’d be an opportunity missed if we didn’t capitalise on it.”

The good news for the Channel Islands is that they’ve learned a lot in the past six years. First, the difficult art of self-promotion. The trick here, according to Clouston, is to eschew the hard sell in favour of offering expert aid to the country’s ultra-wealthy clients on the issues they care about. The Common Reporting Standard is one particularly hot topic at the moment, as the Chinese are obliged to comply with it by 2018 as part of its commitment to G20. Then simply make sure they know that the advice came from the Channel Islands.

FOCUSED EFFORT Another learning is that a generalist approach doesn’t get you very far. “Since we’ve been here, we’ve learned to target specific areas – private wealth, for example – rather than trying to do everything we’d normally do in Jersey,” says Nathan Powell, a Partner at the Hong Kong office of Ogier, which advised on the Noah managed trust deal. “We’ve learned that it’s best to focus only on the areas where we have the strongest selling points.” Ogier also has a representative office in Shanghai, as well as Hong Kong, as much of its client base is on the mainland. But this remains an uncommon choice among Channel Island companies. Hong Kong offers

The future is wealth management China is now home to some 596 billionaires – that’s an 80 per cent increase since 2013 – and they’re an increasingly international bunch. A recent Jersey Finance report, The Internationalisation of Chinese Wealth, recognised a shift: the Chinese market is opening up – not least because the Chinese authorities are keen to prevent asset bubbles in the domestic economy, which is in danger of overheating and bursting. Hence they’re becoming more permissive of overseas investment. The report identified two key drivers among the high-net-worth Chinese: a hunt for better returns than they can get domestically, and a desire to protect their assets for themselves and for the next generation. Indeed, diversification overseas is sensible at the best of times, but only becomes more so when a guiding philosophy of your government is that the state owns everything. With Chinese vehicles not sophisticated enough for overseas

32 january/february 2017

activity, this promises a gilt-edged chance for Channel Island service providers – whose trusts, foundations and private trust platforms are built to do just that. Note also that, as part of its G20 commitment, China is obliged to adopt the Common Reporting Standard in 2018. The Channel Islands have been early adopters of the latest transparency and anti-money laundering standards, and China’s high-net-worth clients are increasingly seeking this kind of cast-iron reputation. Yet the report also identified what’s holding them back – what’s seen as a lack of good advice or options, and where to even start the discussion. “There’s a massive high-net-worth community in China, and it’s growing at a very fast rate in a very short space of time,” says Nathan Powell, a Partner at Ogier in Hong Kong. “But when it comes to knowledge of available products and structures, there’s work to be done.”


4.8% The small percentage of assets of wealthy Chinese invested outside China


The investable assets of HNW Chinese families by 2020

less of a language barrier, and makes it easier to set up a serviced office and negotiate with government locally. Kate Clouston isn’t alone in describing the task of integration to mainland Chinese culture as an “uphill battle”. Guernsey Finance wound up translating all of its promotional materials, its logo and even the name Guernsey itself, into the local language. As the name Guernsey has no direct translation in Chinese, it became ‘Honest Friend to China from the West’ – a quote made by the Vice-Mayor of Shanghai on a visit in 2008. Clouston credits a huge amount of Guernsey Finance’s progress there to its China representative, Wendy Weng, who’s based in Shanghai. Indeed, another major learning is the value of speaking the language yourself – even if it’s just the smallest amount. “When I presented to Chinese partners and began my speech in Chinese, the reaction was so strong it’s almost like we should have warned them in advance,” says Clouston. The key lesson, however, seems to be that the magic ‘potential’ is still very much there. According to the 2016 China Wealth Report, the investable assets of high-net-worth families in China are set to hit $31 trillion by 2020. China’s GDP is projected to grow at 6.5 per cent this year, which may pale in comparison with the jaw-dropping expansion of recent years, but would surely be enough to delight any ailing western economy. And if the renminbi has taken a hit recently, it’s hardly alone; the dollar and pound have both taken a battering too. Chinese buyers are still keen on London property, and vehicles such as the Jersey Property Unit Trust are generating interest. Even though recent changes to the UK tax code mean that UK property isn’t such a strong hook as it was, real estate is still the dominant investment class – especially stable big-ticket infrastructure investments like private hospitals and student accommodation – alongside other tangible commodities such as gold. Yet the Channel Islands are well-placed to hold Chinese investors’ hands as they move towards less tangible alternative assets too, whether that’s private equity or IP (note the increasing ties between Silicon Valley tech developers and Beijing’s entrepreneurs). And then there’s the area with the clearest, most immediate potential: personal wealth management (see box opposite). “There’s so much business to go for in China that even if the economy slows, there’s still enormous pent-up wealth,” says Johns. “So many people over there have said to us: ‘I’ve got all this money, so what do I do with it?’ It’s a massive opportunity, and it’d be naive to the extreme to think that China isn’t a market to go for.” Again, that sounds very promising. The big question is whether we’ll still be stuck using terms like ‘opportunity’ in six years’ time. As for precisely where the Channel Islands caravan is heading, Clouston is clear about where she’d point the horses. “We’d definitely encourage Guernsey businesses to go direct to mainland China if their aim is long-term client services,” she says. “But the advice has to be: please… learn some Chinese.” n


Iain Johns, Head of Private Client Services, JTC Group “There’s so much business to go for in China that even if the economy slows there’s still enormous pent-up wealth. So many people over there have said to us: ‘I’ve got all this money, so what do I do with it?’ It’s a massive opportunity, and it’d be naive to the extreme to think that China isn’t a market to go for.”

Kate Clouston, Director of International Business Development, Guernsey Finance “China is never about short-term returns. If that’s what you’re interested in, you shouldn’t go there. Guernsey Finance took a 20-year view. It began its investment in the Chinese office 10 years ago and it’s now reaching a tipping point and starting to pay off.”

Nathan Powell, Partner, Ogier Hong Kong “Since we’ve been here we’ve learned to target specific areas – private wealth, for example – rather than trying to do everything we’d normally do in Jersey. We’ve learned it’s best to focus only on the areas where we have the strongest selling points.”

DAVE WALLER is a freelance finance writer january/february 2017 33


Investing in



34 january/febuary 2017


As Donald Trump completes his surreal rise to the top of American politics, many investors are left wondering what impact his policies will have on where they should put their money a tax-cutting President and this should result in more consumer spending in general.” Boscher takes a similar line. “I think that in the US, sectors such as healthcare and pharmaceuticals will benefit. Healthcare companies had been sold off on the back of Clinton’s policies. Trump is talking about repealing Obamacare, so that could have a positive impact on healthcare companies.” He also points to the proposed $800bn spend on infrastructure, which could benefit construction and engineering stocks. Then there’s the Trump pledge to loosen regulation for the banks, which may make this sector more attractive to investors. Technology is another area that Boscher believes will increasingly attract investor attention. “Productivity has been poor in the US,” he says. “The only way to increase it is through investment in technology. If there’s higher wage growth – a possible consequence if migrant worker numbers are forced down – and a rising dollar, this all puts pressure on companies to boost productivity in order to improve margins. “I also think that if US companies are encouraged to bring back cash to the US – linked to Trump’s corporate repatriation plan – then a decent percentage of that will go into technology.” Boscher argues that technology stocks look reasonable from a valuation perspective and points to the fact that many US companies haven’t invested enough in tech since the financial crisis, so investment now is more necessity than choice. Quite whether Trump will be able to force firms such as Apple to open massive productions plants in the US remains to be seen – with experts citing issues with the supply chain as a major barrier. The mining, biotech and automotive sectors are also areas that Waters believes are well placed to benefit under a Trump administration. The new President has pledged to support US coal mining, and his protectionist stance could be good news for US car manufacturers looking to sell in the domestic market.

GOOD FOR BUSINESS? Trump was positioned during the campaign as a ‘pro-business’ candidate, but will real business incentives emerge or were pre-election promises based more on rhetoric than substance? Bamford thinks it depends on how effectively Trump garners support on Capitol Hill. “It will be interesting to see if he can get his planned corporate tax cuts through the US political system, but if he can then it could be a boom time for business in the US.” Waters believes Trump could be good for business in january/february 2017 35

Words: David Burrows Illustration: Marthinus Slabber

WE FREQUENTLY HEAR in the media the phrase ‘the markets don’t like shocks’ – and you could argue that there have been few bigger shocks than Donald J Trump’s US election victory. The Republican candidate was written off at various points in the campaign, having seemingly alienated women, Hispanics, Mexicans, Muslims, environmentalists and those with disabilities. But as we know, the opinion polls got it wrong, with Trump becoming the 45th President of the US. So what was the initial reaction from global stock markets and currencies to Trump’s rise to power? Given the fact that his ‘protectionist’ policies are bad news for European companies trading with the US, it was little surprise that following the election, the Stoxx Euro 600 Index lost close to two per cent after opening in London. However, this negative reaction was nowhere near as marked as the eight per cent fall post-Brexit. In terms of currency movement, the dollar fell 2.5 per cent against the euro immediately after the result. Once again, the reaction was on the negative side, but hardly Armageddon. Martin Bamford, Chartered Financial Planner with Informed Choice, isn’t overly surprised by the reaction. “We didn’t see the sharp falls prompted by the UK’s decision to leave the EU – probably due to the realisation that Trump in office is less dramatic than many parts of the mainstream liberal media made it out to be.” Kevin Boscher, CIO at Brooks Macdonald International, agrees that the market reaction to the Trump victory wasn’t mass panic and that by the close of business on the first day, many of the early losses had been reversed. Meanwhile, Mark Waters, Investment Manager at Skerritt Consultants, points out that there was a 40 per cent probability that Trump would win, so there was always a reasonable chance of his success. “What shock there was didn’t last long – the fall only lasted about six hours!” It was widely reported that the market had priced in a Clinton victory, but as Bamford points out, the muted investor reaction since the result was announced suggests that the pollsters are no longer trusted by investors. “In a two-horse race, either candidate can claim victory and polling methodologies have seen their weaknesses exposed once again,” he says. So what does a Trump presidency mean for retail investors and where should the clever money be? Bamford suggests that Trump in the White House is probably good news for pharmaceuticals, infrastructure and consumer stocks. He adds: “Trump is likely to be

Finance the US but he suggests that big questions remain unanswered. “Infrastructure building may well start soon but how big will the spending really be? Where is the money going to come from? We are probably looking at huge borrowing, and the Republicans who control Congress and the Senate may put checks on this,” he says. It’s also hard to envisage how Trump will be able to put more money into people’s pockets through tax cuts while at the same time increasing infrastructure and defence spending. As Waters points out, Trump appeared to be willing to say whatever was needed to get elected – now it’s a case of trying to deliver, which is much harder. Looking at the bigger picture, are we likely to see the value of the dollar continue to fluctuate markedly and, if so, what impact might that have? According to Waters, despite the immediate fall in the dollar post-election, the currency is more likely to see an upward trajectory in the future, assuming Trump’s policies are implemented. “I wasn’t surprised that the dollar rose again shortly after the initial fall because Trump’s policies are stimulus-based,” says Waters. “There will probably be inflation in the US economy, with interest rates likely to rise and therefore the dollar rising on the back of that. It’s also easier for the dollar to rise as global currencies are weak – QE in Japan and Europe is actively trying to weaken currency.” Currency manipulation might prove to be a worry under a Trump administration, as Boscher explains. “If he imposes tariffs on Chinese imports, then China could respond by deflating their currency intentionally, which could be damaging.” And Trump didn’t get off on the right foot with China by making a telephone call to the Taiwanese leader – something that many felt was an enormous gaffe and demonstrated the incoming President’s lack of political experience. Currency aside, the prospect of protectionism itself is a concern. “I suspect that the construction of a moderate Republican house will mean much of his protectionist rhetoric will be toned down,” Boscher suggests. However, even if his protectionist policy isn’t softened, it might prove counterproductive anyway. “Many consumers will base their purchases on quality and price and not necessarily on whether something is US-built,” says Boscher.

HOW TO PLAY THE US Even if Donald Trump’s ‘Americanism not globalism’ mantra scares the wits out of you, as the world’s biggest economy the US is still likely to figure on most investors’ radars. Given some of The Donald’s hawkish

36 january/february 2017

Trump appeared to be willing to say whatever was needed to get elected – now it’s a case of trying to deliver, which is much harder

comments in recent months, shares in defence and arms manufacturers could prove a profitable hunting ground. But for most investors wanting to diversify and reduce risk, a collective fund makes more sense. Bamford, however, is not a big fan of managed US funds. “UK investors have historically struggled to get value from US equity markets through active fund management,” he says. “The best approach seems to be investing through an index tracker fund, with broad exposure to US equities at the lowest possible cost.” He namechecks the Fidelity Index US fund. Waters favours a different tack altogether, getting exposure to the US via sector funds rather than generalist US funds. “Our preference is for specialist funds in areas like cyber security, healthcare and biotech. There are specific exchangetraded funds that track a cyber security index or a global robotics and automation index. You’re investing in many US names but not in a US fund.” Making predictions is difficult as Trump himself represents something new (and not necessarily good) for US politics. Could the billionaire champion of the

blue-collar worker and the self-proclaimed anti-establishment figure confound all his critics and leave the US economy in a better state than he found it? “I think he will prove an agent of change, but it’s too difficult to see now what the outcome of his policies will be or where, if at all, he might make compromises,” Waters says. Bamford isn’t convinced that Trump will even last the course. “I think the next few years will be interesting for US politics. My prediction is that Donald Trump will not complete a full four-year term. “He seems to have been most interested in becoming President, rather than actually being President. Investors should start to think about what President Mike Pence could mean for the markets in the not-toodistant future.” n DAVID BURROWS is a freelance finance writer

SECTORS AND STOCKS TO WATCH President Trump has pledged to spend more on US defence, so defence and aerospace manufacturers will appear attractive to share investors. Companies such as Lockheed Martin, Raytheon and Boeing look to be well placed to benefit from this. Infrastructure spending was a consistent message during the election campaign, so construction and engineering names including Jacobs Engineering, Fluor and Caterpillar are likely to attract interest. Smaller companies focused on the domestic market are likely to fare better than large multinational companies that could feel the impact of Trump’s protectionist policies. US financial website TheStreet believes that individual stocks such as Cemex might benefit under Trump. Its products would come in handy for the President’s plans for the US-Mexico border, where he has pledged to build a wall stretching at least 1,000 miles. Private prison operator the GEO Group is also seen as a good play. Before the authorities send undocumented immigrants packing, they would first have to put them through a judicial process, which would likely entail time in jail. This in turn could prove profitable for facilities run by companies such as GEO. On the latter two ‘recommendations’, whether you choose to invest may well depend on your ethical stance on such issues.


finance industry firms offer rich pickings for cyber criminals – and they’re having to sharpen up their act as those criminals become increasingly sophisticated


IF YOU WERE to suggest to most CEOs that they might want to include an £8.5 million cost, attributable to nobody they know, in their latest accounts, the likelihood is that you’d be sent packing. However, that’s precisely the amount that information security research body the Ponemon Institute found was lost on average to cybercrime by large UK financial services businesses in 2015. That £8.5 million figure is an increase on each of the previous three years and it gives an important insight into the negative value of cybercrime to the financial services sector. As such, it serves as a warning to the Channel Islands, where 40 per cent of GDP relies on the health of the finance industry, which itself relies to a great extent on information and communications technology for its everyday operations and to stay connected with the rest of the world.

In the islands themselves, there’s a growing awareness of the threat that cybercrime poses. In February last year, John Harris, Director General of the Jersey Financial Services Commission, wrote to all CEOs of financial businesses in the island warning them of the risks. “Common risks involve data/information theft, misappropriation of client assets and reputational damage,” he wrote. “These all carry financial costs, which may be significant and may also result in breaches of the law…” Stephen Baker, Senior Partner at Jersey-based law firm Baker & Partners, is in no doubt about the threat that cybercrime presents to the Channel Islands’ financial sector. “Widespread hacking is a massive threat,” he says. “Criminals are so sophisticated that they pose a threat to institutions and clients.” The trouble is that cybercrime sets unique challenges to any january/febRuary 2017 37

Words: Kirsten Morel



business. First, it can come from any part of the world. A hacker can be based in any country and use various methods to cover his or her tracks, but equally, they could be an insider or have help from someone within the business. “There’s genuine insider risk,” says Mike Loginov, CEO of cyber security specialist the Ascot Barclay Group. “Over 40 per cent of commercially related cybercrime involves insiders, making the management of user privileges and the use of sensitive company information a significant issue for many organisations.” As well as the issue of geography, cybercrime comes in many forms. From DDoS (distributed denial of service) attacks to spearphishing, whaling, malware and old-fashioned brute-force hacking, the list of threats can seem endless. On top of the actual losses derived from being a victim of cybercrime, John Harris’ letter went on to remind business leaders that there are also regulatory issues that can lead to the companies that have suffered a breach being punished through fines, restrictions or even criminal trials. Naturally, the apparent enormity of these risks has led organisations to turn to the insurance industry for cover in the event of a breach. “We’re seeing an increase in enquiries about cyber insurance,” says John Lowery, Corporate and Professional Risk Broker at Channel Island insurance broker Rossborough.

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“From an insurance point of view, there’s the first-party risk to our client’s own business data and the third-party risk to their clients’ data, which can also result in fines and penalties. Recent cases have demonstrated this is the case.” He cites TalkTalk’s fine of £400,000 last October following the theft of the personal data of nearly 157,000 customers. Companies are also taking alternative routes to dealing with the aftermath of attacks, says Baker. “As criminal investigating authorities receive fewer resources, we’re seeing private lawyers being hired. And they’re acting aggressively because if you fall victim to an attack, you only want it to happen once – creating a deterrent effect is important.” On the regulatory front, EU regulations set to come into force in May 2018 will affect Channel Island businesses that process the data of EU residents. The General Data Protection Regulation (GDPR) introduces the concept of ‘privacy by design’, which means that data protection considerations must be included in business processes for products and services. On top of this, there is scope for fining companies up to €20 million or four per cent of total worldwide annual turnover. “GDPR will lead to many businesses having to change their attitudes and cultures to data protection,” says Justin Bellinger, Group Business Transformation and Development Director at


A hacker can be based in any country and use various methods to cover their tracks. Equally, they could be an insider or have help from someone within the business

telecoms provider Sure International. “We can try and block access [to malicious actors] through firewalls and other technologies, but the weakest link is us, the users. As long as we can’t shift the culture away from relying on the IT department to the users, we won’t get anywhere.” The need for a cultural shift has been brought about, in part, by the rise in the number of attacks enabled by human behaviour, and which top the list of common attack methods – a number of which are examined below.

PHISHING ATTACKS Up to 95 per cent of all data breaches start with a phishing email – a message designed to look like it is from an authentic source but is counterfeit. The intention is to lure the reader into clicking on a link or opening a contaminated attachment, which then installs malware into the network and hands access to the attacker. A 2013 attack on US retailer Target was initiated by a phishing attack on the company’s air-conditioning maintenance provider. Once the link had been clicked by an employee of that provider, it downloaded a version of the Citadel Trojan, malware that can, among other things, log key-strokes and obtain email server details. In just under three weeks, the attackers stole 40 million credit card numbers and over 70 million client data records. Phishing attacks come in a number of guises, with spearphishing the most common. In such an attack, the email appears to come from a trusted source or individual. Similarly, ‘whaling’ attacks send spoof emails from senior executives, on the basis that many of us act unquestioningly when asked to do something by the boss. Technology is an important defence against phishing attacks, but with their sophistication always increasing, there’s no doubt that email filters, firewalls and the like must be backed up by human awareness training.

CRYPTO-LOCKER OR RANSOMWARE ATTACKS As Bellinger explains: “This is an attack that uses a piece of malware masquerading as a genuine piece of software or an email. Once installed, it encrypts the contents of the machine’s hard drive and issues a ransom note. The note demands payment, usually by Bitcoin, in return for regaining access to the system.”

Unfortunately for the victims of such attacks, there is often little choice but to pay the ransom, although the cost involved can be offset with insurance. “We’re definitely seeing more enquiries about protection against cyber extortion,” says Lowery. “Following an attack, the insurer will take control of the systems at a technical level and will pay the ransom.” This does, however, create a dilemma. “Paying the ransom just makes you more valuable to the attacker,” says Bellinger. “It commoditises both you and your data.”

DD o S ATTACKS These attacks involve flooding a company’s systems with requests to the point that they can no longer function. They are aimed at causing disruption and, in themselves, don’t directly lead to a network breach or the loss of funds or data. They can, however, be used as a distraction from a second attack aimed at theft. DDoS attacks are the most common form of attack, with 57 per cent of financial institutions worldwide reported to have fallen victim. The scale of disruption can be enormous, as an attack last year on US internet performance management company Dyn proved – the incident took out internet services across the northeast of the country for most of a day. DDoS attacks are focused on a particular organisation and can cause huge problems, particularly for companies that transact online. Whereas attacks aimed at breaching a network often need human intervention (unwittingly or not) to succeed, DDoS attacks can only be fought off by defensive technologies. Cybercrime is a global problem and finance is a particularly attractive victim, but, as has been pointed out in this article, there needs to be a cultural shift within organisations if the problem is to be dealt with effectively. Loginov sees this shift as one that needs to redefine how we think about cyber risk management at a cross-functional organisational level. “There’s very little information security representation on boards despite 70 per cent of CEOs saying they see cyber security as a major threat to their businesses. One of the biggest challenges is understanding that this in not purely a technology challenge, it’s just as much an HR issue, because we’re dealing with changing cultures towards personnel taking the online threats and security of data a lot more seriously.” That threat is not limited to businesses alone. As Panama has discovered following the Mossack Fonseca breach, reputational damage can affect the whole jurisdiction. If the Channel Islands are serious about maintaining their global reputation as well-run jurisdictions, they must ensure their approach to information security looks beyond technology and works to bring everyone working in the sector onside. n KIRSTEN MOREL is BL’s Technology Editor


amid all the talk of super-intelligent computers and massive job losses, are we really going to be taken over by machines or should we embrace the march of technology?

getting under the skin of 40 january/february 2017


ARTIFICIAL INTELLIGENCE (AI) is apparently the next big thing, and it may put humanity firmly in its place as the second most intelligent species in the known universe. But what exactly is it? Should we be concerned about the possible dangers or marvel at its potential benefits to humanity? Or for those of a less philosophical and more practical nature, how can you profit from the impact of increasingly intelligent computers? BL tackles the big questions…

SO WHAT IS THIS AI MALARKEY THEN? Artificial intelligence is a branch of computer science that aims to create intelligent machines that can perform tasks that normally require human intelligence. Up to now, AI has been used in discrete ways in so-called ‘narrow AI systems’, such as stock trading algorithms. However, researchers are also working on ‘general AI’, which aims to develop intelligent computers that can think and plan across broad areas, teaching themselves just like humans. The recent victory by AlphaGo, an AI computing system built by researchers at Google, in a game of Go against a human champion illustrated that AI is on the cusp of overtaking humans in the intelligence stakes. This machine taught itself to play the game and such machines could, in time, become super-intelligent.

WILL WE BE REPLACED BY ROBOTS, LIKE IN WESTWORLD? We may be a long way from lifelike humanoid robots, but computer intelligence is going to push many humans out of jobs. Not immediately, but soon. This is a fear that many people have,

SO WHAT ARE THE PRACTICAL IMPLICATIONS? Society is going to have to plan for massive increases in unemployment. We also need to examine the ethical issues, alongside the benefits and dangers of AI technology. In the future, we also need to ensure that there are regulations in place to ensure that this technology isn’t misused and that there are sanctions for transgressors.

WILL AI EMPOWER HUMANITY AS A WHOLE OR JUST THE CHOSEN FEW WHO WILL CONTROL IT? There’s no reason in principle why AI couldn’t benefit humanity as a whole, although in practice its benefits aren’t likely to be equally distributed as a matter of course. Indeed, ensuring that this technology isn’t controlled by faceless corporations will be important. Tech titans Google, Facebook, Microsoft, IBM and Amazon are already teaming up to develop january/february 2017 41

Words: Chris Menon

and it’s completely understandable, and not without foundation. For example, just as cars replaced horses, AI is going to do away with the need for human drivers as autonomous vehicles become the norm in a few decades. They’re here already and are becoming better drivers than humans. Even many skilled jobs are going to disappear, replaced by AI robots and algorithms. Stocks are already traded by AI, journalists are being replaced, and even accountants, lawyers and doctors might find their numbers dwindling. A recent report from the BBC suggested 95 per cent of accountancy roles in the UK are at risk of being carried out by machines within 20 years. As Lorne Daniel, an Analyst at finnCap, points out: “AI is quicker and cheaper and doesn’t make mistakes.” However, Nick Bostrom, a Director at the Future of Humanity Institute, says: “We estimate that any adverse labour market impacts would be greatly outweighed by economic gains. To think otherwise would seem to entail adopting the Luddite position that a majority of current technological developments have a net negative impact.”


new standards for AI. Who’s going to provide the democratic oversight to ensure what they deliver is in the best interests of humanity? Professor Stephen Hawking, the world-famous physicist, has also warned that AI could be the ‘worst thing to happen to humanity’ if it isn’t properly managed, because it could be used to create ‘powerful autonomous weapons, or new ways for the few to oppress the many’.


Professor Stephen Hawking has warned that AI could be the ‘worst thing to happen to humanity’ if it isn’t properly managed

One of the most worrying scenarios is that we develop super-intelligent computers with goals that don’t perfectly align with our own. Bostrom argues that the development of true artificial intelligence might lead to the extinction of humanity. He’s concerned that if AI acquired the ability to improve itself, it might evolve to become smarter than the human brain by many orders of magnitude, replacing humans as the dominant intelligence on the planet. Others think this is unlikely, but it probably isn’t worth leaving any room for risk, given the possible consequences. Stephen Cave, Executive Director of the Leverhulme Centre for the Future of Intelligence at the University of Cambridge, and an expert in AI, has written of the need to know how to ‘turn off’ AI if necessary, writing that ‘any reasonably intelligent system will seek a method to disable the off button – we have to keep one step ahead of it’.

SO HOW ARE HUMANS GOING TO CONTROL AI TO ENSURE IT DOESN’T BECOME SELF-AWARE AND PERHAPS CHOOSE TO ERADICATE US, AS IT DID IN TERMINATOR? Cave argues that we’ll “need experts to define explicitly in each setting (whether for medical robots in hospitals or tax robots in a future HMRC) precisely what the moral code is in that environment”. The trouble is, 20 years from now, how would you control some 16-year-old genius who decides it’s a neat idea to build a super-intelligent robot with his friends online? Morality might be an irrelevant concept to a machine designed with only one aim in mind: to fulfil its desires.

WHAT LEGAL PROTECTION WILL NEED TO BE IN PLACE TO ENSURE AI ISN’T MISUSED? Shaun Lowde, Head of Technology at law firm Wiggin, explains the difficulties involved in regulating AI. “It’s complicated, not least because there isn’t an accepted understanding of what we mean by ‘artificial intelligence’ and it’s a concept that evolves all the time,” he explains. “In other areas, legislators have traditionally looked to regulate products, services and processes (that is, the potential causes of problems) and a lot of the legislation that we have operates on that basis. In the future, our legislators may need to pass legislation that focuses on outcomes instead, so we don’t focus on what artificial intelligence is, but on what it does, or could do.

42 january/february 2017

Lowde continues: “The real challenge lies not in pursuing companies who break the law, but in deciding what law they are breaking in the first place. “Like the internet, artificial intelligence doesn’t respect nationality, and so we may have technologies that have no boundaries that are governed by laws that do. “We probably need to agree a common set of standards (outcomes that are universally accepted or rejected) and use that to drive our laws. Unfortunately, this is a process that’s fraught with difficulties and delay – as anyone who has followed the debates around international climate change treaties will attest.”

IF I WANT TO LEARN MORE ABOUT AI, WHAT SHOULD I READ? A good introduction is Surviving AI by Calum Chace. Another book for your AI library is On Intelligence by Jeff Hawkins. Or if you want to learn more about how bots are going to steal your job, read The Rise of the Robots by Martin Ford. For those seeking a cerebral, philosophical view of the dangers and opportunities ahead, Nick Bostrom’s Superintelligence: Paths, Dangers, Strategies is essential reading.

SO WHAT CAN WE CONCLUDE FROM ALL THIS? You may find the whole subject of AI rather unsettling, but it’s vitally important that you learn more about it since it’s going to dramatically affect the future of mankind. n CHRIS MENON is a freelance business writer

Where to put your money Here are some options for those wishing to invest in AI. Ewan Markson-Brown is an Investment Manager for both the Baillie Gifford Pacific Fund and the Pacific Horizon Investment Trust. About a quarter of these funds are invested in Asian stocks outside Japan, which are investing in some form of AI. He considers that AI disruption is imminent, with the arrival of autonomous vehicles, and is impressed by Chinese internet firm Baidu, which comprises 3.7 per cent of his Pacific Fund. “Baidu’s autonomous vehicle, which it’s been working on since 2013, has already driven countless miles and successfully integrated into Beijing traffic,” he explains. Seeing Machines, a small Australian company, offers AI expertise in machine vision. Its eye and face-tracking technology will be installed in the 2017 Cadillac CT6 and it’s working in the aviation and rail industries. Google is working on developing general AI that learns just like a human brain and appears to be a good bet for the future in robotics and healthcare.


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Non-executive directors are playing an increasingly important role on company boards, but who are they, what do they do, and how do you become one?

Take your seat at

the table

46 january/february 2017


Words: David Craik

Channel Islands. The Guernsey NED Forum has 160 members. Smaller firms and even start-ups are also adding to the numbers as they look to NEDs for direction, expertise and industry contacts as they grow. “Companies absolutely need NEDs, especially when they have a wide shareholder base,” says Adam Moorshead, Managing Director, Guernsey, at JTC Group. “A NED represents the interests of the shareholder by helping to deliver the best results for the company. They do this objectively, acting independently of the executive directors. NEDs are a key control element of the board.” They can also help fill in any glaring skills gaps. “In the Channel Islands especially, there’s a focus on NEDs who can play an important role in financial sector areas,” says Moorshead. “A NED with expertise in asset management and distribution can help an investment fund; a surveyor can be important to a real estate fund.” Gale accepts this need for specialism, but believes the focus must be on a diversity of sector skills. “You need to look at a board as a whole, so a range of NED skills, be they technical, financial or legal, and a range of backgrounds and knowledge is important,” she states. Soft skills such as marketing, HR, understanding digital technology and the ability to engage with stakeholders are also vital. Because of this greater focus on board composition, skills and governance, NEDs are giving up much more of their time to the role. “To be a top-drawer NED you have to give this commitment to the board and give the time to fully understand the company’s operations, strategy, products and the requirements of the shareholders, including meeting them face-toface,” says Moorshead. Mills adds: “There’s much more time given by NEDs to understanding the regulatory and risk issues a business faces, as well as the strategic direction of the company. It’s no longer a case of turning up for four meetings a year. There are many more informal meetings with executives, discussing strategy, or with auditors.”

A PERFECT MATCH So, where can businesses find their ideal NED? They tend to be people with current or previous managerial experience in areas such as sales, marketing, legal or IT. They may hold a full-time job, be retired, be a newbie NED or hold at least one other NED role. An executive recruitment agency is one route, as well as recommendations from local introducers and word of mouth. Indeed, Gale argues, recruitment methods can often be the cause for ineffective NED input. “A lot of NEDs are appointed through personal contacts and companies tend to pick people from similar backgrounds and specialisms. A more formal method of recruitment needs to be

january/february 2017 47

THE LIFE OF a non-executive director isn’t what it once was. Where previously it may have been acceptable to turn up for an hour at a board meeting, enjoy a hearty lunch and then head back to the golf course, today’s NED is expected to get more closely involved in business performance. The change has been driven by increased levels of boardroom regulation, such as the 2014 UK Corporate Governance Code’s focus on risk management, and high-profile governance failures, including Co-op Bank and Volkswagen. Investors and other stakeholders are demanding more oversight and control and NEDs are expected to play their part. “There’s a bigger spotlight on NEDs now,” explains Helen Gale, Head of the Non-Executive Directors Programme at Deloitte. “If a company fails, there are more questions asked of the board than there were 10 years ago. There’s a bigger focus on corporate governance, not just in the public sector but also private businesses that want NEDs to help them develop best practice.” Peter Mills, a Director at Optimus Group and Chair of the Guernsey NED Forum, adds: “A NED can help a company’s overall performance by using their knowledge of an asset class or experience in, say, marketing products to new countries. They can help steal a march on rivals.” So who are NEDs and what do they do? In short, while an executive director helps run a company’s business, a non-executive has no such daily management responsibilities. They are expected to contribute to the development of company strategy; monitor management performance; and ensure financial information is accurate and risk management systems are robust. Succession planning and remuneration strategy can also be on their agenda. “NEDs are there to point out what executives, who are tied up in day-to-day management, don’t know,” says Mark Dunster, a Partner at Carey Olsen. “This could be employment problems, or issues with a commercial landlord, the regulator or pensions. The trick is to challenge executives and management constructively.” Under the UK Corporate Governance Code, publicly listed companies should appoint independent NEDs to ensure ‘that no individual or small group of individuals can dominate the board’s decision-taking’, but exact numbers for all UK quoted and unquoted businesses are difficult to pin down. According to the Non-Executive Directors’ Association, there are an estimated 15,000 NED positions on UK company boards, but this comes with the proviso that some NEDs may hold two or three roles. And it doesn’t include NEDs on public sector boards and not-for-profits, or trustees on charities. The association also estimates that there is an average of four NEDs on each board of a large business in the UK and


NEDS are as accountable as the other directors to regulators and shareholders if a business goes wrong Want to be a NED? developed, with company bosses taking a step back and properly assessing who and what they need. Carrying out regular reviews of the board and its effectiveness can help you find any gaps you need to fill,” she says. The Channel Islands, it seems, has a problem with NED diversity. According to Dunster, who is also Chairman of the Guernsey Association of Compliance Officers, the pool of NEDs is far too small. “There’s a small clique of people holding NED roles. There should be a maximum number of directorships, which would allow a wider spread of talent,” he says. Mills says businesses creating a clearly defined role and job description for their new NED could help. “You need a strong role profile and a strong letter of appointment, setting out exactly what the expectations are,” he explains. “You also need to ensure they have the right personality for the group. Will they work well together? Are they strong at communicating and happy to speak up?” And it’s not just the business that needs to be careful in its selection. A NED must also do his or her own due diligence. “NEDs face considerable personal risks in terms of personal liabilities and potential criminal charges,” says Moorshead. “They’re as accountable as the other directors to the regulators and the shareholders if a business goes wrong or gets into trouble. You need to know exactly what you are getting into, including the past history of a business. Without that you can be legally exposed.” Indeed, according to the Guernsey Financial Services Commission’s 2012 Corporate Governance Code, whilst there are clear operational differences between a NED and an executive director, they have the same legal duties, responsibilities and potential liabilities. “As a director you can end up in court, you can end up being sued,” says Dunster. “The code fails to recognise the commercial

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“People want to become a NED for a variety of reasons. Many have gained a lot of experience and want to continue working in a business environment. Others may have worked in one type of business to executive level and want to do something different,” says Louis Cooper, Chief Executive of the Non-Executive Directors’ Association. He offers these six tips to land that first NED role: ● Understand the role Research what it means to be a NED. You need to operate at more of a strategic level, challenge executives and provide an independent perspective. ● Small steps Develop boardroom skills by becoming a school governor or taking a trustee role at a charity. ● Set clear objectives Select sectors and areas that are appropriate to your skills. Match your experience with a NED role. ● Tailor your CV Detail how you motivate people, or negotiate with clients or suppliers, communicate with different stakeholders, analyse complex information and make tough decisions. ● Network Think about who can help you and who you can approach. Utilise existing contacts and reactivate ones from the past. Try and find an existing NED to act as a mentor. ● Continuous learning NEDs need to keep on top of legal, regulatory and technical changes, as well as honing their soft skills.

reality that executive directors deal with the everyday running of the business and are expected to have a good knowledge of everything that’s going on. A NED has much less involvement but when things go wrong they’re legally targeted in the same way. Obviously, punishment is needed when they have been dishonest, but there’s too much expectation of what a NED can do within a business. Regulators need a change of emphasis when it comes to enforcement.” Dunster believes the increasing likelihood of the legal risk is another factor prohibiting strong talent from moving into NED roles. “Why put your career and your livelihood on the line? We need to encourage good, intelligent people to come forward and become NEDs,” he states. NEDs will never be as vital to the success of a business as an executive director or the management team, but they can provide the expertise, advice, probing, wisdom and belief, which can help pave the way. n DAVID CRAIK is a freelance finance writer


Peter Mills, Mark Dunster and Adam Moorshead will all be speaking at BL’s Channel Islands NEDs Forum on 23 March 2017 at the Royal Yacht in St Helier. For information on the schedule and speakers and to book tickets, visit

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How to handle toxic workers

50 january/february 2017


YOU’VE PROBABLY WORKED with one. Maybe you have one on your team – or even worse, that person is your boss. The toxic worker has a lot of workplace grief to answer for, but, as a manager, how should you deal with these problem employees whose behaviour causes high staff turnover and low morale? It’s a serious headache. Harvard Business School research from 2015 showed that a toxic worker has a bigger impact on the performance of an organisation than a star performer. It calculated the annual cost savings of not hiring a toxic worker as $12,489, which is the expense of replacing workers who leave in response to a toxic worker on a team. This compares with increased output of $5,303 as a result of hiring a top one per cent performer. The study was based on the data of more than 50,000 workers fired from 11 US companies, and its authors, Michael Housman and Dylan Minor, found that workers are much more likely to be toxic if they are highly productive, overconfident, self-regarding and profess to follow the rules – exactly the kind of people you seemingly want around. This makes them even harder to uncover and trickier to deal with. So what is a toxic worker? There are eight possible characteristics, according to Wendy McHugh, Managing Director of Channel Island firm Vantage Personnel – someone who’s a bully; throws tantrums;

who’s stubborn; passive-aggressive; moody; a liar; a micro-manager; or is overdemanding. “The most common are the tantrum-throwers, passive-agressives and liars,” she says. And the easiest to spot are the tantrum-throwers. Toxic behaviour can be insidious. Christopher Journeaux, founder and psychotherapist at Quiet Room Therapy in Jersey, says he’s noticed that the initial contact between a new employee and a bullying co-worker can be quite positive; difficulties emerge over time. Other toxic workers he’s come across are those who take credit for everything a team has achieved, as well as those who suffer what he calls “sloping desk syndrome – where challenging and less-pleasant work tends to slide off the toxic worker’s desk onto others”.

SPREADING UNREST As the Harvard research points out, the impact of a toxic worker on their team and their organisation is disproportionately large. Colleagues and customers will leave the organisation to avoid working with them. And the toxic worker’s behaviour can be infectious, causing low team morale, a bad atmosphere and poor productivity. “They are like zombies infecting other people,” says Nick Goldberg, UK director of HR consultancy LHH Penna. “In a company, you have promoters, detractors and the people in the middle, who are

Words: Emma De Vita

the passives. The passives can be heavily affected by toxic workers, especially if they are high-flying and popular in other parts of the organisation,” he explains. How should you deal with a toxic worker? Well, just as the best way to avoid a hangover is not to drink, the best way to handle a toxic worker is not to employ them in the first place. That means being rigorous in your recruitment process. “You’re better off hiring someone who’s a bit less productive and confident but cares more about their colleagues,” says Minor, who’s also an Assistant Professor at the Kellogg School of Management at Northwestern University. He recommends using psychological testing to detect how self-regarding a candidate is, looking for any philanthropic work they’ve done, and contacting their references to find out how much they pitched in with the team and helped others. If you suspect you might have a toxic person in your firm, supervise them closely and place them physically close to someone more senior whose behaviour you trust, recommends Minor. As a manager, however, you need to nip the problem in the bud. If there are problems with a new recruit who’s still on probation, they can be moved on quickly. “Once you’ve hired them and they’ve passed probation, it’s very difficult to get rid of them,” says McHugh. Don’t let the difficult conversations you january/february 2017 51

It would be nice if we got on with everyone we worked with, but there’s likely to be at least one person in your company who’s a horror show. so what can you do about it?


will need to have with them put you off, advises Goldberg. “As a leader, you know when someone is toxic. That person might be a high flyer but, from my experience, when you have that feeling, don’t wait three or six months to make that decision because within six months that person has affected another eight people,” he explains.

FACING IT HEAD ON Acting fast is important when it comes to dealing with toxic workers. The first thing you need to do is to have an informal chat with them to highlight their behaviour and ask for an explanation. Are there personal circumstances – divorce, a bereavement or financial trouble, for instance – that are affecting their performance? If so, is there a way for you to take some of the pressure off them at work and give support? McHugh says managers must be clear to the worker concerned that this is a temporary solution to help that person through a difficult time, and that they must eventually resume their responsibilities. A firm timeline must also be agreed, she advises, otherwise “someone can become very comfortable not doing as much as they were doing previously”. If a staff member

Acting fast is important when dealing with toxic workers. The first thing to do is to have an informal chat with them

continues to contribute less, that will put too much pressure on their co-workers, which will result in the business losing key members of staff. If, however, it transpires that there are no particular problems in the worker’s personal life, says Goldberg, an important question to ask is: do you want to work in this organisation? “Depending on how that conversation goes, you might give it a try for a few months and see if they turn the situation around. If they don’t, you’ll have to have a more difficult conversation and let them go,” says Goldberg. It’s at this point that formal HR procedures come into play – when the person is found to lack the capability to do their job or their conduct is poor. But McHugh warns: “Capability is ‘can’t do’ and conduct is ‘won’t do’. You must follow the procedures to the letter.” But what if the toxic work colleague happens to be your manager? Even if you feel intimidated, it’s better to pluck up the courage to speak to them, says Goldberg. “It’s more dangerous to go to your boss’s boss, because if they don’t agree with you on some of the challenges, you’re creating a lot more of an issue. The first thing your boss will say is: ‘Why didn’t you tell me?’.” You’re much more likely to have a successful discussion if you pitch it the right way, says Goldberg. “It’s all about how you frame that conversation. Try: ‘I really want to be successful here, I want this business to be successful, but one of my biggest challenges is you. How do we get through this?’. Be specific – ‘You’re micromanaging me when it’s unnecessary’.” Alternatively, if you’re too nervous to have such a tricky conversation with your boss, you can follow McHugh’s advice and raise the issue with someone more senior or with the HR department. As McHugh says: “Sometimes it can be a minor misunderstanding or it can be a breakdown of the working relationship, so mediation can be offered.” It might be that you and your manager simply can’t work together. When this happens, it’s normally the subordinate who’s transferred to another department or, if the manager is in a business-critical role, their management responsibilities are transferred to someone else. If you have a toxic worker in your midst, take comfort from the fact that you’re not alone. “Most organisations have more than one person deemed toxic or difficult to deal with,” says McHugh. But the problem will only get worse if it isn’t faced head on. n EMMA DE VITA is a freelance business writer

52 january/february 2017

Five don’ts when dealing with toxic workers ● Don’t ignore them. They will create many more problems, so act fast. ● Don’t take everything they say at face value. Find out the facts, listen to what they say, probe a little bit more. And don’t feel you have to give an immediate response. ● Don’t become emotionally involved. A toxic worker can get under your skin – if you lose your temper, you’re no longer in control. ● Don’t talk to other people in their team about them. It’s tempting, but you’ll only antagonise the situation. ● Don’t leave your recruitment process open to abuse by the toxic worker. Conduct rigorous psychometric tests, speak to former employers and don’t go on first impressions.

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Everyone wants to work as smartly as possible, but do all the apps, hacks and dubious ‘advice’ make you less productive? Maybe now’s the time to ditch all that nonsense and get back to basics

How to be

54 january/febuary 2017


productive… without the gimmicks WHO WOULDN’T WANT to be a productivity ninja? It’s impossible not to feel as though you could be working faster and smarter if only you tried this app or that hack. And it doesn’t help that we’re bombarded on a daily basis by all sorts of tips from the likes of and Lifehacker, which more often than not leave us feeling guilty for being such slackers – or worse, give us a seemingly legitimate excuse to procrastinate. “Most personal productivity measures are actually tools of procrastination – they’ve just become another demand on our working days,” says Professor André Spicer of Cass Business School. “It’s about turning your whole life into some kind of bureaucratic filing exercise, and that can be terribly time consuming in itself.” He believes we’d all be better off ignoring the advice we’re assailed with and just get on with our work. “The point of most productivity hacks, apps or tips is to enable you to get on with the most valuable and critical aspects of what you do by minimising less valuable but presumably necessary activity,” explains Stephanie Abbott, Head of the Knowledge Management and Innovation Practice at Janders Dean. “If you’re not focused on getting on with the core parts of your job, then productivity tips are probably not for you – just knuckle down.” Spicer says a lot of advice out there is produced to feed an industry, and might only be tools for self-promotion by an

expert. “They have to put forward some tips and ideas and these are often dressed up as being brand new and very unusual, but they’re not,” he says. “Your first task, when being bombarded with advice, is to push aside a lot of the bullshit and the empty jargon.” Recent tips on working smarter from, for instance, included eating more chocolate, taking a morning cold shower or staring at a pot plant. Another problem with productivity tips is that they can actually cause more confusion than they’re worth, because people try to implement something that doesn’t fit with their working style. “A one-size-fits-all approach to personal productivity doesn’t work,” says Carson Tate, author of Work Simply. A tool that doesn’t match your individual style will be doomed to failure. “By understanding your unique work style, you’re able to quickly and easily select the productivity tools and strategies that will work for you,” she says.

WHAT WORKS FOR YOU? The first thing you need to do in order to improve your personal productivity is to understand exactly how you work best. Try out Tate’s self-assessment on working styles to identify your own. Are you a people-focused Arranger, a goal-oriented Prioritiser, a Visualiser or a Planner? You’ll then be able to pick the tools most likely to suit your cognitive style and have the best chance of working. For example, a to-do

list app will satisfy a Planner but will leave a Visualiser cold – they’re better off using mindmaps to organise their tasks. You should also try to match tasks to energy levels. Ruth Field, self-styled ‘Grit Doctor’ and author of Get Your Sh!t Together, advises that you listen to yourself to find out what time of day you’re most productive – for most, it’s the morning. “You have to know your body, know your rhythms and work with them,” she says. Save the demanding tasks for when you’re naturally more energised, and the least for when your creative juices have run out. “Align the execution of tasks to your energy level,” says Tate. “If you’re tired, hungry or pissed off, it will be incredibly difficult to focus and manage your attention.” Next, ensure that you’re prioritising your work correctly. “For those who genuinely want to be more productive, poor prioritising and a lack of analysis of where the time really goes are among the biggest barriers,” says Abbott. Start by clearly understanding your priorities and goals, and what tasks contribute most directly to those, she advises. You can then identify activities that are taking up too much time compared with their value, and look for ways of addressing those specifically. “‘Better’ is a much more practical goal than ‘perfect’, and incremental gains can soon add up,” she says. Keeping a time log can be an effective january/february 2017 55

Words: Emma De Vita


way to find out how you really spend your time. Keep a diary for one week to record what you’re doing every half-hour. Once you’ve completed your log, which can often throw up surprising revelations about how you spend your time, you can see how to better manage it. Spend more time on the tasks that matter most and minimise the tasks that don’t.

TO DO OR NOT TO DO? This brings us to the ‘to do’ list. While it’s nice to tick off a list, Spicer and Field see no merit in using anything more than the most basic of lists that serves solely as a reminder of the three most important things to get done in a day. This can free up your brain from unneeded information – spending hours prettifying, coding and managing a list is a surefire way to procrastination hell. Once you’ve worked out your priorities and how much time to spend on each task, knuckle down. That’s easier said than done for most of us. Keeping focused means learning to control distractions such as social media, meetings and emails. Field recommends putting your phone

A one-size-fits-all approach to personal productivity doesn’t work – a tool that doesn’t match your individual style will be doomed to failure

and other devices out of sight if you need to concentrate on a task, and disabling the internet and notifications when you’re working at your computer. “People might think they’re still working, but I guarantee you are way more productive without these things in your sight,” she says. Spicer is also a big fan of the Pomodoro

technique to get you focused – time yourself to work for 25 minutes, then reward yourself with a five-minute break; repeat this four times and then take a longer break. “We have a limited attention span and you need to take small breaks now and then,” he says. If you find yourself putting off a piece of work because you find it daunting, reduce it to smaller tasks. “Break things down so it’s not a huge elephant – that makes you feel you can tackle it,” says Field. Should companies introduce rules to help us be more productive? Spicer suggests organisations ban meetings on certain days or during certain parts of the day. And Tate urges companies to be more aware of the impact of distractions on staff. “Open-plan offices are popular for the collaboration that’s possible,” she says, “but they’re often loud, and staff frequently interrupted. By making closed office space available, companies can support their employees’ needs for a quiet space where they can work without interruption.” n EMMA DE VITA is a freelance business writer

Top five tips for productivity ● Learn how you work best and match your tasks to your energy levels. Most people tend to be at their prime in the morning, so don’t lose the early working day to time-wasting admin. ● Pick tools and apps that suit your working style and forget the others. ● Prioritise your work. Tackle the most difficult tasks first – if you don’t, you’ll only procrastinate. ● Track your time for a week to uncover the truth about how you spend your working hours, then minimise the time you spend on pointless meetings and emails. ● Ditch your phone and switch off the internet when you need to focus. Out of sight, out of mind.

56 january/february 2017


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Words: David Burrows

with customers and potential customers on a regular basis – it’s a time when content really is king. From blogs and marketing communications to social media and knowledge pieces, businesses are arguably generating more copy across more channels than ever before. Of course, the quality of the content can vary dramatically. Many firms generate copy internally, often written by enthusiastic amateurs, while others employ content specialists to do all the hard work. But once a piece of copy has been submitted for internal review, this is the point at which everything can go horribly wrong, as countless ‘stakeholders’ get their hands on it – dragging out the approval process and often making the copy a lot weaker than it was in the beginning. Hilary Ivory, Editorial Director at Can Can Creative, believes this is particularly true in sectors such as financial services, where compliance is given such precedence. From the point of view of a PR or copywriting agency, she believes working with a financial services client isn’t an attractive proposition. “We simply refuse to take banks on as clients,” she says bluntly. “This is a big statement to make, given how potentially lucrative these clients might appear, but too often their legal and compliance departments strip the guts out of anything you do.” She suggests that the fear factor (particularly of litigation) is far more prominent within the financial services sector than elsewhere. “There’s a need for compliance, but typically legal and compliance departments rule the roost and nobody stands up to them. If content is produced that’s in plain English and accessible, after being put through various hoops from legal and compliance, then the copy becomes tedious and the message is often lost.” Nick Kirby, Editor-in-Chief at BL magazine, agrees that working with financial services companies can prove problematic. “Because the sector is regulated, it’s understandable that compliance departments want to be sure the firm isn’t making claims that can come back and bite it on the arse. But it can mean copy becomes woolly and vague.” He adds, though, that compliance is just one more layer in what can already be a drawn-out process. “On smaller projects, where you’re dealing with maybe three or four people, approval can be relatively

Why doesn’t this come to the bottom of the page?

58 january/february 2017


painless. But on bigger projects – for instance, a corporate magazine, where multiple departments are involved – you could be waiting for sign-off from a string of people and only then have to go through compliance. When that many people are involved, the tracked changes on a document can resemble a fruit salad!” Kirby appreciates that following misselling scandals such as PPI, compliance in financial services is a necessity. However, he reveals that too often the approach is heavy-handed. “Compliance isn’t a specific science. Some departments you work with are easygoing, while others are a nightmare and sub-edit the life out of copy so that often there’s no definitive statement.” Matters aren’t helped when legal and compliance teams go beyond their remit of content accuracy and start making style points. “I’ve had feedback insisting we use the word ‘could’ rather than ‘might’. Things like this really test your patience,” Kirby says.

working?- apart


Brooke Kenyon, Account Director at Orchard PR, echoes the view that too many people involved in the process can make effective communication very difficult. But she insists that numbers aren’t always a hindrance. “Sometimes a large team can work well, but it relies on everyone involved understanding the common goal and for roles to be clearly defined so they don’t overlap.” This means the brand team checking the tone of voice; the marketing team ensuring communications are on-message; and the compliance desk ensuring products are fit for purpose. If roles aren’t defined at the outset, it’s much harder for people to feel engaged, says Kirby. “You need to establish the ground rules – who is responsible for what and when will it be delivered? You need to engage people at the beginning and to do this, you really need one person overseeing the whole project. Ownership is important, as you need to have somebody who’s able to make decisions.” Ivory takes a similar line. “I’ve worked on projects that are believed to be close to sign-off, but then it becomes evident that the Marketing Director hasn’t even looked at it,” she explains. “If there are no clear lines of responsibility, the job becomes very difficult.” Of course, sometimes during the later stages, senior managers who have previously had no input, suddenly

Some compliance departments are easygoing, while others sub-edit the life out of copy so that there’s no definitive statement

WE LIVE IN an age where companies want to communicate

Swap these pages


Too many cooks… mess up the copy Having loads of people involved in the copy sign-off process can cause delays, mixed messages, or make it read like a pile of crap. If you want your copy to ‘sing’, then some people need to keep their grubby paws off it january/febRuary 2017 59


decide the project is their number one priority. They often decide to change the ground rules and, not surprisingly, this can often lead to conflicting messages and all-round confusion. As Ivory explains, the role of the PR agency in such instances is to get the project back on track through forthright dialogue with the senior manager in question. “It’s generally not at CEO level but at middle management level that issues crop up,” she says. “Egos come into play – people want their name in lights, whether it be in articles, brochures, reports or blogs.” And when it comes to opinion or comment pieces, Ivory insists there is a need for a frank discussion with senior managers if they are wrongfully under the impression that they are skilled writers. “It’s tougher when you’re young and relatively inexperienced to say to a CEO that what they’ve written isn’t up to scratch. Go back 20 years and I wouldn’t have had the nerve to do that,” she says. “However, when you’re more experienced, you can tactfully explain the lack of clarity, that they aren’t on-message. More often than not, they do accept the wisdom of what you’re saying.”

THE KEY TO PLANNING Lisa Downes, Director at Liquid PR, maintains that if a clear strategy is in place at the outset and key messages have been established, consistency in communications is far easier to achieve. “Having a process helps,” she says. “A clear understanding of the best people to provide input in certain areas is an advantage. And if someone isn’t available at a given time, that there’s someone else in place to provide input.” Contingency planning is crucial in a digital world. The arrival of 24-hour live news and social media means speed is of the essence. As Downes points out, a company risks responding slower than their competitors to a key event if their people aren’t all briefed and lined up for comment, or sign-off is slow. She also stresses the importance of forward planning with compliance, making clear the need for urgency. “They need to be told, for instance, ‘we have two hours to respond’. Everyone needs to know what has to be done and when.” Corporate communications hit a low point (whether it be in a brochure, press release or blog) when marketing jargon is shoehorned into the copy. Words and phrases such as ‘learnings’, ‘ideation’, ‘swim lanes’, ‘blue-sky thinking’ and ‘thought leadership’ should automatically activate the delete button every time they appear in a draft document. Some companies insist on sticking to the buzzwords and turns of phrase used by their peers but, as Nick Kirby argues, this jargon will only lose the readers. “Some clients you deal with want to sound like everyone else. They talk in business speak, they want to be seen to be with the zeitgeist. The danger is that

60 january/february 2017

Words and phrases such as ‘learnings’, ‘ideation’, ‘swim lanes’, ‘blue-sky thinking’ and ‘thought leadership’ should automatically activate the delete button

these Should le quote b u o d be marks?

Can a word or phrase automatic activate a delally ete button?

by sounding like everyone else, they lose sight of who they are.” As for the concept of ‘thought leadership’, Kirby is highly dismissive. “Most people or companies who use this buzzword aren’t anywhere near being thought leaders. Customers don’t want ‘thought leadership’ anyway, they want you to be good at your job and to speak to them in a language they understand.” Rambling press releases that try and cram in too many messages are Ivory’s particular bugbear. “Why, when a new product is being launched, does a press release include details of other products that have been around for years?” she demands. How often is a PR agency brought in for its expert skills and guidance, only for the client to demonstrate who’s in charge by dismissing their efforts at every turn? Too often, is Ivory’s response. “It’s hugely frustrating, when you deliver copy that’s well-crafted, balanced and with no repetition, and the client then inserts copy that’s clunky, makes the brand look stupid and dilutes the message. You question why they hired an agency in the first place. Why have a dog and bark yourself?” In terms of dealing with this problem, Downes believes that it comes down to building trust. “The clients are in charge, but there are times when you need to explain why something is the right course of action. Clients will always know their industry better than the agency, but communicating with clarity is our area of specialism. “As an external partner, you can and should push the boundaries and challenge them. Over time, you can prove the value you’ve added as their trusted adviser and have a much better working relationship.” n

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DAVID BURROWS is a freelance business writer

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BL guernsey Guernsey shanghai briefing highlights CRS issues for China


here are signs of a growing urgency in mainland China to better understand the implications of next year’s introduction of the Common Reporting Standard (CRS). Institutions from within China’s trust and banking sectors, as well as private clients, are increasingly seeking guidance from jurisdictions that were early adopters of the OECD regime. That appetite for knowledge was recently demonstrated in Shanghai, where Guernsey Finance, in conjunction with the Griffin Plutus Family Office, attracted almost 200 senior Chinese banking, trust, securities and insurance practitioners to an initial briefing on CRS (pictured). Some of the key issues practitioners are looking to address, ahead of the move towards global transparency, relate to concerns around data protection and correct reporting procedures. Kate Clouston, Director of International Business Development for Guernsey Finance, said: “Guernsey has been adapting its regulatory requirements around the CRS since it signed on in October 2014. Our finance sector has navigated some of the uncertainties and questions now being confronted by China, and is in a good position to share its expertise with other jurisdictions.” Discussions have begun between the two

privy council approves new arbitration law

T financial hubs around opportunities for Guernsey to export its compliance expertise to China through an educational agreement to bring practical training courses, focused on CRS and other reporting processes, to Shanghai in the first instance. “CRS highlights that offshore wealth management isn’t just about accounts opening, money transferring and insurance policy purchasing, it’s a deliberate choice of a suitable offshore financial centre. Due to its well-regulated economic environment and the well-trained professional practitioners, more and more Chinese clients are awakening to the Guernsey option,” said Antoine Kuo, a Founder of Griffin Plutus Family Office and a speaker at the event. n

he Arbitration (Guernsey) Law 2016 has come into force following approval by the Privy Council, incorporating new provisions to modernise the framework for arbitration in Guernsey. These include: ● Flexibility – a range of measures are designed to enhance the flexibility of the arbitration framework and give a significant measure of control to the parties themselves. ● Efficiency – along with the broad scope for parties to determine their own procedure, the law contemplates procedural mechanisms directed towards improving the efficiency of the arbitration process. ● Consumer protection – the new law provides protection for consumers against being forced to bring their complaints against businesses in arbitration and shutting out access to the court system. James Tee, Senior Associate at Collas Crill, noted: “International commercial arbitration is big business in recognised centres such as London and Singapore, so the new law represents an opportunity for Guernsey to compete in that market. It is also hoped the law will encourage more local disputes in Guernsey to be determined by way of arbitration, taking pressure off the Royal Court’s increasing workload.” n

private investment fund regime launched


uernsey has introduced a Private Investment Fund (PIF) regime to give fund managers greater flexibility and simplicity. Developed by the Guernsey Financial Services Commission in consultation with the funds industry, the new PIF recognises that some investment funds have a closer manager-investor relationship than a typical agent. The PIF dispenses with the formal requirement for a prospectus, significantly reducing the cost and processing time of launching a fund. It can be closed- or open-

62 january/february 2017

ended and no more than 50 legal or natural persons should hold an economic interest. Where an appropriate agent acts for a wider group of stakeholders, such as a discretionary investment manager or a trustee or manager of an occupational pension scheme, that agent may be considered as one investor. While there is a limit on the number of investors in the PIF, no attempt has been made to limit the number of investors to whom it might be marketed – a feature not available under comparable regimes.

The launch follows the introduction of Guernsey’s manager-led product (MLP) regime in response to the Alternative Investment Fund Managers Directive, which places the regulatory burden on the manager and not the fund. Carey Olsen Partner Ben Morgan said: “The MLP will be tremendously useful once the third-country passport is extended to Guernsey. Meanwhile, the PIF regime will be a fantastic boost for the Guernsey funds industry across all asset classes for the institutional investor fund market.” n

BL Guernsey

GFSC fees for 2017


he Guernsey Financial Services Commission is to apply a blended rate increase of two per cent, including anomalies, to the fees charged to licensees, effective from 1 January 2017. There will also be a change to the fee structure for the insurance sector. Last year, the Commission agreed to work with representatives of the Guernsey International Insurance Association (GIIA) to determine whether an alternative approach could be taken to the allocation of fees across the insurance sector while continuing to deliver proportionate and credible regulation. The GIIA proposed a restructuring of fees that would see international commercial general insurers and reinsurers bearing a greater proportion of the fees relative to other types of insurer that may take up fewer regulatory resources. It was proposed that insurance linked securities business, which is fully collateralised and so presents a lower regulatory risk, should bear a lower proportion of the fees to reflect that reduced risk. An appropriate regulatory fee is seen as important for the development of this area of the market. The GFSC consulted on the proposal and, although not all consultees gave their support, it decided to implement the changes, given that they were developed and promoted by the industry body representing most insurers. n

Strategic review for insurance sector


wC, in association with the Committee for Economic Development at the States of Guernsey, has released a strategic review of Guernsey’s insurance industry to assist in the development, promotion and long-term success and sustainability of the sector, both domestically and internationally. The insurance sector employs approximately 775 employees on the island, comprising 11 per cent of employees within the wider financial services industry. It generates nearly 20 per cent of the finance industry’s GDP. The continued health and future growth of the sector is important to the prosperity of the Guernsey economy. PwC was engaged as an independent expert consultant to carry out the strategic review and to produce a report that would assist the island and the Committee in developing a strategic plan with clear actions and priorities. The project involved various aspects including: ● Understanding and analysing the local environment and the insurance sector ● Developing and prioritising sector opportunities and assessing threats ● Identifying the appropriate industry stakeholders responsible for pursuing each of the growth opportunities. A number of local and off-island industry experts and stakeholders contributed to the report and have collaborated with PwC and the States on this initiative. Evelyn Brady, Partner at PwC, commented: “Our report highlights the value the insurance sector brings to the bailiwick’s economy – something that can at times be underestimated. “We believe this review can change that. The opportunities for the sector to explore are quite varied and we are certain it is very well placed to take advantage of future growth opportunities. “What’s crucial now is for industry leaders, government and stakeholders to work together to take proactive and progressive steps in order to realise these opportunities.” The strategic review is available at the States of Guernsey’s website, n

new law firm opens for business in guernsey


erbrache & Farrell, a new independent law firm, has launched in Guernsey. It will focus on corporate, property and dispute resolution, and has been founded by Partners Gavin Farrell, Alastair Hargreaves and Martin Jones. Peter Ferbrache, President of the States of Guernsey’s Economic Development Committee, is to act as Consultant to the firm, while Stuart Platt-Ransom has been named as its Chief Executive Officer. All of the firm’s Partners and staff have worked both at other large offshore law firms and together on a crossdisciplinary basis. “Ferbrache & Farrell brings together highly respected lawyers and advocates with decades of experience, who are all recognised locally and internationally,” said Advocate Ferbrache. n

The new firm’s line-up left to right: Stuart Platt-Ransom, Martin Jones, Peter Ferbrache, Gavin Farrell and Alastair Hargreaves january/february 2017 63

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BL jersey

BL Jersey

Arbitration in trust disputes – the good and bad


s businesses in the Channel Islands peer anxiously over Brexit's shoulder and 'The Donald' storms into the White House amid protests in the United States, the world's communities have never felt so divided. The Government of Jersey, in the context of trusts law (and proposing to follow Guernsey's lead), has started consultation on possible amendments to its Trusts (Jersey) Law 1984, which would allow a settlor to include within the trust instrument a clause that requires all or any disputes relating to the trust to be adjudicated upon by an arbitrator. This would signify a momentous change in the manner in which trust disputes are resolved in Jersey – avoiding hostile Court proceedings in favour of arbitration. The proposals would mean that the decision of the arbitrator would be binding against the settlor, trustee, successor trustees and protectors, and also on beneficiaries (including those beneficiaries as yet unidentified or who are children). The primary advantage of arbitration is that trust disputes (whether between beneficiaries or between beneficiaries and trustees) can be resolved privately and confidentially and the private affairs of the trust be kept away from the public glare of a hostile dispute in Court. There are, however, disadvantages to the proposed amendments: ● Whether or not such an arbitration clause could legally bind a beneficiary who is not, in ordinary circumstances, a party to the trust instrument is unclear. ● Where parties are already in dispute, there’s the risk that such disputes will flow over into the process of selecting one or more arbitrators, thereby creating a resolution process that may take longer

than the adversarial Court process itself. ● There’s also a risk that the arbitration process could prove more costly than litigation through the Jersey Courts because of the need to pay for one or more arbitrators who are specialists in the field of trusts for the duration of the case (as well as legal advisers). ● The courts of Jersey and Guernsey are the location for some of the most intricate and advanced trust litigation in the world – the judgments from the Channel Islands' judges are cited as leading authorities in courts around the world. Arbitration may lead to a decrease in the number, quality and variety of cases before the Channel Islands' courts, with a risk that Jersey trust law as a separately identifiable body of legal principles will diminish.

● It’s unclear whether an arbitration award made in the absence of a voluntary submission to arbitration will be enforceable in a foreign jurisdiction. In its consultation paper, the Jersey Government has stated: ‘Whilst Jersey naturally wishes to be at the vanguard of new developments for the trusts industry, [it] has concluded that it is not desirable to impose enforced arbitration in the trusts context, certainly at this time.' In times of increasing uncertainty, whether imposed arbitration will become part of Jersey's trust law remains to be seen. A final decision is pending and it will likely become clear in the early part of this year. What is clear is that a settlor who chooses to include an arbitration clause in a trust instrument (whether it is legally binding or not) is giving a strong indication to those who may ultimately benefit from the trust itself that hostile litigation is a course of last resort, with alternative dispute resolution (ADR) being preferable in all circumstances. Whilst the proposed Jersey model doubtless has Guernsey’s rules for trusts and ADR in mind, it has, perhaps sensibly, not gone as wide. The Guernsey rules embrace all forms of ADR, not simply arbitration, but seem to have rarely, if ever, been used in practice. The reason for that is probably the cumbersome process for representing minor and unborn beneficiaries, and the fact the rules are limited to claims arising from breaches of trust. The Jersey model, therefore, is probably a better one – and one which is more likely to result in Jersey being a centre for trust arbitration, as is the case for the Bahamas, for example. n january/february 2017 65

As Jersey plans to introduce changes to its trusts law, Damian Evans, Partner, Walkers Jersey, and Paul Buckle, Group Partner, Walkers Guernsey, take a look at how arbitration may play a larger role

BL jersey Opportunities from Chinese wealth highlighted

Jersey updates policy on beneficial ownership


hinese investors are increasingly looking for greater diversification beyond the mainland and specialist expertise for structuring their global private wealth, real estate and corporate affairs, according to new research from Jersey Finance. The white paper, entitled The Internationalisation of Chinese Wealth – 2016, is based on research by Jersey Finance and Hubbis, a provider of events and content for Asia's wealth management community. It was launched at Jersey Finance’s Asia Roadshows in Shanghai and Hong Kong late last year. The paper found that Chinese highnet-worth and ultra-high-net-worth individuals are increasingly looking to access a full suite of global wealth management services. Key findings from the paper include: ● There’s an increasing need for business succession planning, with 43 per cent of practitioners confirming that is their main focus, followed by a mix of insurance/protection, estate planning, and legacy planning, which are roughly equally weighted. ● Asset planning, family succession and the diversification of wealth are the key drivers for much of the cross-border trust structuring out of China – 25 per cent is tax-driven. ● The family office has become an increasingly popular option among UHNWIs in China (38 per cent of respondents), followed by traditional trusts (29 per cent) and private trust companies (22 per cent).

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● Looking ahead five years, respondents predicted this trend will continue, with just over half of Chinese families opting for family office structures. The report also highlighted challenges facing Chinese investors, including a lack of awareness of international regulation such as the OECD’s Common Reporting Standard. Other findings include: ● Eighty per cent of respondents cited a lack of good advice and starting a discussion about international wealth as two biggest hurdles for Chinese clients when it comes to wealth transition. ● The biggest misconception among Chinese families of international wealth structuring is that it involves a ‘loss of control’ (72 per cent of respondents). ● Maintaining compliant structures in an increasingly transparent and compliance-driven world is a major challenge. Richard Corrigan, Interim Director of Financial Services for the Government of Jersey, said: “As China’s high-net-worth and ultra-high-net-worth individuals take an increasingly active role in their own investments, there are signs that more of them are entrusting a larger share to wealth professionals, both domestically and through international finance centres, especially in the current volatile environment. “We believe there is a stronger need for first-class IFCs and financial practitioners to provide a full suite of wealth management services – including estate and wealth planning, corporate finance and real estate to serve the needs of Chinese wealthy individuals.”n

he Government of Jersey has released a document detailing an enhanced policy on beneficial ownership and a register of directors. The policy has been developed in light of the growing need for law enforcement authorities to be given information quickly to investigate financial crime, particularly terrorist financing. The policy, which is predominantly relevant to trust and company service providers (TCSPs) administering Jersey corporate and legal entities, will require the TCSP to update the central registry within 21 days of becoming aware of a change of beneficial ownership of a corporate they administer. Additionally, the government is to create a central register of directors of Jersey companies, with information being exchanged with law enforcement and tax authorities on request, on the same basis as beneficial ownership. The government notes the importance of technology in implementing the new policy, in order to allow TCSPs to automatically and securely provide the central registry with information. The policy document was supported by a programme of outreach by the government and the Jersey Financial Services Commission (JFSC) to the financial services industry at the end of last year. The JFSC Companies Registry has also published documents on implementing the new policy, which can be found at n

BL Jersey

A snapshot of health and wellbeing


he newly released publication Health Profile for Jersey 2016 sets out local population health indicators across a range of areas, many of which can be compared to other regions, including Guernsey. It provides a snapshot of the overall health of the population of Jersey and of the ‘determinants of health’. The Profile covers 2013 to 2015, which enables comparison with the latest available UK and EU indicators. Overall, Jersey’s statistics are positive: ● Higher health score than UK population ● High life expectancy ● Average life satisfaction scores higher than most countries ● Low stillbirth and infant mortality rates ● Decreasing deaths from heart disease ● Very low teenage conception rates ● High coverage for child immunisations ● Decrease in smoking. However, Jersey has comparatively low breast-feeding rates; one in six babies are at risk from passive smoking; high figures for death from suicide or accidents; high

level of premature death from liver disease; and one in three children and one in three pensioners on relative low income. As with the rest of the world, cancer and heart disease are the major causes of death in Jersey, but many premature deaths – from liver and heart disease, many cancers, accidents and suicides – are preventable. The impact of alcohol and smokingrelated ill health on the island’s economy is evident in the data. Smoking still causes one in five deaths in the 35+ age group, with lung cancer accounting for a high proportion of working life lost. The Profile also reports on behavioural and environmental factors, some of which contribute to good health and others to poor health. Wider determinants of health, such as the society, environment and communities in which islanders live and work, make big differences to the health and wellbeing that people experience. Martin Knight, Head of Health Improvement, said: “There's a commitment in the States of Jersey’s Strategic Plan to ‘do

more to support healthier lifestyles and to help reduce preventable disease’. In essence, a sustainable healthcare system is one that helps people to stay healthy, not one that only treats illness. The data in this report will help us focus resources on policies that help create healthier environments and support preventive measures. “This report shows that smoking and alcohol risks, though still too high, are improving. We need to ensure continued efforts through States of Jersey alcohol and tobacco strategies. Internationally, dietary risks are known to have overtaken smoking and alcohol as causing the highest burden on health. The data from this report, with findings such as 51 per cent of the adult population being overweight and obese, and increasing, confirms this is likely to be the case in our island population too.” The Profile can be found at the States of Jersey website, n

Jersey 2036 – what you'd change

Stable picture for Jersey property



he results of a community consultation to help shape a long-term vision for Jersey – held from January to July 2016 – have been released. Part of the consultation asked residents to rate Jersey in several areas. Though this painted an encouraging picture, respondents were concerned about being able to independently afford a decent standard of living. Community safety, healthcare, and giving children the best start in life were ranked high in people's aspirations. Protecting the beauty of Jersey's natural environment and its air and water quality also scored a high rating. A total of 4,146 islanders took part in the My Jersey survey, providing more than 8,000 comments on aspects of island life now and how they'd like it to be in the future. People's views will inform a long-term vision for Jersey, so the island can address economic, social and environmental challenges, such as an ageing population, and technological and climate change. The results have been published in full online – go to – as well as in paper format. A set of proposed performance indicators will be published soon, to allow people to judge Jersey's progress towards achieving the vision. n

he house price report for the third quarter of 2016 has been released by the States of Jersey Statistics Unit. It shows that on a rolling four-quarter basis, the mix-adjusted average price of dwellings sold in Jersey during the year ending Q3 2016 was £454,000, essentially unchanged compared with the previous quarter. The report revealed that: ● The seasonally adjusted mix-adjusted average price in Q3 2016 was two per cent down on the previous quarter and three per cent up on the corresponding quarter in 2015 (Q3 2015). ● Two- and three-bedroom houses recorded higher mean property prices in Q3 than in Q2 (at £440,000 and £538,000). ● Four-bedroom houses and one- and two-bedroom flats recorded lower mean property prices over the same period (£811,000, £212,000 and £345,000 respectively). ● The turnover of properties in Q3 2016 was the highest recorded quarterly figure since 2006. ● Overall housing market activity, on a rolling four-quarter basis, was eight per cent up on the previous quarter. ● On a rolling four-quarter basis, rental prices in Jersey were one per cent higher during the year ending Q3 2016 than in the previous quarter (ending Q2 2016). n january/february 2017 67



The Agenda is compiled by BL’s Fashion and Lifestyle Editor, Thom O’Dwyer, with additional material by Danny Cobbs.

goes RED

1. SIMPLY RED In one of its most daring ventures yet, global media company Condé Nast has entered the highly competitive world of e-commerce. Its new online luxury shopping destination – – is curated by two of the publisher’s fashion glossies, Vogue magazine and GQ. It’s seen as a natural progression, selling high-fashion consumables to the magazines’ avid fans, both male and female. These boots, by Ukraine-born, Vienna-based designer Petar Petrov, were recently featured in Vogue. Since launching his womenswear brand in 2005, Petrov has become an international name, attracting a cult following. His look juxtaposes hard and soft lines that are distinctively modern with an artful, cutting-edge aesthetic. The monochrome leather Lipstick half boot pictured here features a black zipper detail and a cleverly quilted high chunky heel. Step out in style! £720,





3. ICE AND A RASPBERRY? According to US business publication Forbes, infused spirits will be the big drinks trend for this year. Infusions are shaking up the bar scene from Perth to Paris and back again, as fruit, vegetables, herbs or spices are added to plain spirits and steeped to develop distinctive flavours. Slingsby Gin – located in the picturesque Yorkshire town of Harrogate – is one hip distillery that’s revitalising the fine art of gin-making. The key, say the distillers, is to add flavour through botanicals – and they’ve selected 24 for their spirits, sourced locally and from across the globe. One of the most innovative of the firm’s award-winning London Dry Gins has been its limited edition Rhubarb Gin. Crafted using the famous Harrogate spring water and infused with the finest handgrown Yorkshire rhubarb, it’s proved so popular that it’s become a key member of Slingsby’s family of tipples. Enjoy it straight, or with a premium tonic water on ice with a raspberry (or two) for garnish. Gorgeous stuff! £39.99 70cl bottle,

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2. BACK TO THE FUTURE Having left the family furniture business 12 years ago to strike out on their own, husband and wife Richard and Libby Baker opened Rume furniture and homeware store in Brighton. Their vision – to strip back classic English furniture to its bare essentials to capture its inimitable timelessness – makes for playful sophistication. This red leather Thunderbird chair is a perfect example of their style. As comfortable as it is beautiful, it combines basic function with pure, pared-back design. It’s the perfect easy chair, especially when partnered with the matching footstool or ottoman. Every piece is individually made, one at a time, to the customer’s specifications, and both chair and footstool can be upholstered in leather or fabric. To bring individual style into your home, look no further than this classy design operation in Brighton. Rume’s the name. Thunderbird chair and footstool, £2,070 excluding fabric,

4. BAGS OF STYLE Iranian-born designer Naza Yousefi’s bold take on the classic box bag made her new handbag label, Yuzefi, a major talking point when it premiered at London Fashion Week last year. Since then, the Midi Babel Bag – especially in red – has taken the fashion world by storm. Every fashionista and fashion editor in the galaxy just has to have one, so it’s in constant pre-order mode online. Handcrafted by talented artisans in the heart of London, the bag features a signature gusset and knot closure. The Midi Babel can be worn in four ways – held by the ring handle; with the removable short chain; using the leather shoulder strap; or transformed into the most chic rucksack in town. Leather and suede lined, each bag also has an internal branded leather pocket. The best of British and an unconventional approach to fine leather craftsmanship. £545,




5. THE PYJAMA GAME Designer Francesca Ruffini eschews the idea that pyjamas should be restricted to the bedroom only. Now her hugely fashionable label FRS – aka For Restless Sleepers – has made that dream a reality. Sleepwear as streetwear has become a global trend. US Vogue’s revered editor Grace Coddington gave it her seal of approval during Fashion Week, and at recent red carpet events, A-List stars have looked ready for the boudoir rather than the BAFTAs. Jessica Alba, Katy Perry, Rihanna and a host of others have been papped in their PJs. You can wear the whole slinky, silky set for full impact after dark, or just the top with skinny jeans or tailored trousers. Vintage florals, bold graphics and lush crushed velvets are the favoured fabrics. Pictured here by FRS is a beautiful graphic print silk PJ-style blouse with patch pockets, and matching widelegged PJ bottoms. Perfect for any style-conscious sleepy time gal for a glam night out or in! Blouse, £455; trousers, £408,


6. IT’S A CINCH! For autumn/winter 2016-2017, all the top designers used the slouchy bathrobe-style cut as inspiration for some of the season’s best and most wearable coats. These are scene-stealing, unstructured, cuddle coats, and they’re definitely making the rounds this winter. In Paris, the beloved left-field label Vetements stepped into its stride, offering a bevy of inspired designs that exploded cool. One of the most scrumptious robe coats on any catwalk was in Vetements’ new season show. This checkered blanket-style coat is crafted in Italy from the finest and softest fleece. The oversized slouchy design has a hood, as well as the de rigueur self-tie belt, making it the laid-back choice for the freezing winter months. It’s a take-you-anywhere kind of coat – perfect over a little black dress but equally hip over leather leggings. Cinch that belt and wear it with attitude! £940,

7. COLOUR OF MAGIC Féerie Rubis is the newest fragrance in the hugely popular Féerie Collection from Van Cleef & Arpels. Introduced in 2008, the collection is described as alluring, whimsical and romantic, offering women ‘a world of infinite magic where dreams and emotions play the leading roles’. Inspired by blood-red rubies, symbolising love and passion, the fragrance is housed in a magnificent gemstone bottle with the characteristic little fairy relaxing on the silver neck. The olfactory tale unfolds with the exotic and lush notes of raspberry, redcurrant, pink pepper and lychee. At its heart is a beguiling bouquet of magnolia, freesia, peony and iris. And finally, undertones of silky musk, tonka bean, cedar and sandalwood leave a trail in the base notes. What more could a girl wish for this Valentine’s Day? Eau de Parfum, 30ml, £37; 50ml, £54; 100ml, £80, at better department stores nationwide

7 ➨ january/February 2017 71

8 8. SEEING RED The Ferrari 488GTB supersedes the critically acclaimed 458 Italia, while paying homage to the original mid-engined Ferrari of the 1970s, the 308GTB, writes Danny Cobbs. It’s been given a more aerodynamic shape and features a Formula One-inspired double-front spoiler that channels air over and under the car. And the rear diffuser adjusts airflow to improve grip without creating excessive drag. But more important than the loveliness of


its bodywork or its race-derived suspension is the 488GTB’s 3.9-litre V8 engine, because it introduces twin-turbochargers into the mix. Power is up from 552bhp to 661bhp, which translates into a 205mph top speed and 0-62mph time of three seconds. It sounds good, too. Really good. Like a baritone banshee. Basically, the 488GTB is a road-legal track car. It has a flurry of new-age technology to keep it safe on the road, but that can be turned off, which will completely change its

9. RED HOT KICKS The Magista football boot has been re-engineered for the urban street by Nike, ushering in breathability, flyknit uppers and a super-flexible Pylon midsole for durable, lightweight cushioning. The result: the Nike Air Footscape Magista Flyknit FC Shoe in team red and black. The sockline helps give support and stability, and the shoe features heel and tongue pull tabs. Finishing off the coolest cool shoe on the block, the waffle outsole provides traction and durability. Definitely the must-have sport shoe of the season. £165,

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intentions. Then, it becomes a totally focused racing machine, surefooted and thrillingly exciting. In its quest for technical supremacy, Ferrari may have been accused in the past of suffocating that magical quality that makes its cars so special (let’s not forget the FF as a prime example). Not any more. With the 488GTB, Ferrari has found its mojo again and that more than justifies the hefty price tag. From £183,964,




10. UNI-SEXY Already blurring sexual identities on the fashion catwalk, Gucci is now designing for a unisex market with its latest range of watches. The Gucci Sync Collection draws on the digital world as an effective way to connect with the younger and more hip consumer. The collection’s streamlined aesthetics are timeless, blending a contemporary flair with the more traditional Gucci trademarks. Pictured here, the stainless steel Swiss-made watch has an ETA quartz movement with the new Gucci Sync logo engraved on the back case. The rubber strap features, of course, the signature red and green web detail that is Gucci. There’s no doubt that this is the watch of the moment. Buy it or else! £330,

11 12. BACK ON FIRE After Tom Ford left Gucci as Creative Director in 2004, the brand suffered something of a midlife crisis. Then, out of the blue, in 2015 Alessandro Michele took the creative helm, shaking the 94-year-old house back into the limelight. “I’m trying to cause a little revolution inside the company,” he said on his appointment. And so he has, moving the fashion parameters further and further left-field, particularly in menswear. But among the OTT Pearly King button embroideries and Snoopy knitwear, there are more restrained, revamped classics for the fashionable man who wants to look good but not goofy. Like this beautiful cashmere and wool checked tartan blazer. With tapered and soft, rounded shoulders, the jacket features branded metal Gucci crest buttons for the more relaxed two-button closing. What you might call classic history rewritten with panache. £1,473,

11. RED DEVILS Grown in Brazil and Peru, the pink peppercorn is in fact the fruit of a shrub known as the Peruvian Pepper Tree and a member of the cashew and mango family. First brought to Florida in 1598 as an ornamental plant, its fragile, fruity berries became known for their sweet, peppery taste. Now the pricy, spicy flavour enhancer is on every foodie’s shopping list. It works well with pork, beef and rich game meats, as well as adding a piquancy to vinaigrettes, cream sauces and even cocktails. Too soft to be ground in a pepper mill, the berries must be crushed by hand. These little red devils can also lend an aromatic zing to gin. Just pour 16 fl oz of your favourite gin into a jar, add a tablespoon of pink peppercorns, leave to infuse for 24 hours, strain and store in the fridge – and you have the makings of a mega-mean G+T! £19.99 for 270g,

12 ➨ january/February 2017 73

THE AGENDA 13. LADY IN RED Matches Fashion’s Digital Trunk Shows are your first chance to see and shop for exclusive collaborations and latest collections from an elite clutch of celebrated designers. Not only can you click on the items you covet, you can also watch these fashion setters discuss their creative output. Recent Trunk Shows have included Nicholas Kirkwood, JW Anderson, Simone Rocha, Emilia Wickstead, Joseph Altuzarrai, and most notably the iconic True Brit couturier Zandra Rhodes. British fashion’s National Treasure has plundered her back catalogue to create a limited edition assembly of 10 of her favourite creations. One of the most dramatic of the ravishing and dramatic gowns from her archives is the 1985 Manhattan Dress (pictured), crafted in vibrantly hued silk-chiffon. Also showcasing her deft skill as a textile designer, the quintessential New York skyline is depicted in a highly stylised tone-on-tone print. With a generous sprinkling of over 300 Swarovski crystal embellishments, this is definitely a statement dress to die for! £1,865,



14. STICKER-LICIOUS It’s a girly thing. And nobody on earth does girly and quirky better than the quintessentially British accessories designer Anya Hindmarch. Her much-coveted stickers have become the fashionista’s best friend. In collaboration with über stylist, Charlotte Stockdale, the designer’s embossed flame-red lip design adheres to any surface – smartphone cover, diary, wallet, tote bag, whatever – permanently. And Hindmarsh has updated her stickers this season in line with the pixelation theme of her AW16 collection. Along with the embossed leather hot lips design, the heartshaped sticker is encrusted with crystals. Either will warm any girl’s heart come Valentine’s Day! Hot Lips Sticker, £45; Heart Sticker, £65,

15. DRAMATIC EFFECT For innovative, cutting-edge design, Brighton is where it’s all happening. In addition to Rume, that temple of quirky contemporary-classic interior design, it’s the home of John Moore, one of the most interesting and forward-thinking jewellery designers to come along in ages. After university, Moore spent several years sharing a workshop and gallery with his jewellery designer mother in Leamington Spa. Then in 2009, he moved to Brighton, where he set up his own studio. Last year, Moore won three major design awards, including the prestigious Goldsmiths’ Company Award. From his Elytra Collection – which takes its inspiration from beetle wings – these hand-dyed, anodised aluminium reversible earrings make a bold, bright statement. The feathery scales can be worn either closed or open – the perfect solution to the latest craze for mismatched earrings – and they respond to movement in a gentle, fluid way. The exquisite, and tactile, matching pendant hangs from a sterling silver snake chain and is perfect for day or evening wear. The designer’s other pieces are equally distinctive and really do bring jewellery to life in a rare way. Earrings, £260; pendant, £210,

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16. PUCKER UP! “Nothing is as glamorous or as empowering as lipstick,” says Poppy King, Australian entrepreneur and founder of cult beauty brand Lipstick Queen. Dedicated to the transformative power of lipstick, there’s a virtual rainbow of unique, flattering and glamorous shades to choose from. The red palette – from the vibrant, juicy, semi-sheer Eden, to the lustrous, high-gloss, saturated colour of Metal Red – is totally on-trend and tempting. And as well as being longlasting, thanks to the inclusion of nourishing ingredients like shea butter, vitamin E, and apricot kernel oil, the lipstick is wonderfully moisturising. The range also offers real choice when it comes to different lipstick finishes and textures – everything from velvet matte to glossy satin. So, girls, whether you want sheer and pretty, matte and dramatic, or something in between, Lipstick Queen has your lips covered. Lipstick, £22; lip liner, £18,




17. LET THERE BE LIGHT Design nostalgia is thriving, with reworkings and reissues of classic pieces like the iconic Panthella Lamp. The brainchild of Verner Panton, one of Denmark’s most influential 20th century furniture and interior designers, the lamp was the result of a partnership with Louis Poulsen, the Danish lighting manufacturer founded in 1874 and relaunched in 1971. The innovative and futuristic originals are much sought-after. Last May, Louis Poulsen launched the Panthella Mini Table Lamp based on the original drawings and designs. But it’s been scaled down from the original 400mm to 250mm. The Mini has a painted metal shade and comes in a rainbow of bright colours from Verner Panton’s colour spectrum. The modernistic, minimalistic, clean lines of this Scandinavian design are elegant, simple and beautiful. Perfect for today’s contemporary urban dwelling. £292,

18. CHECK MATE American company Filson has specialised in rugged-quality clothing and goods since 1897 when it supplied many of the 100,000 prospectors who flooded into north-western Canada during the Klondike Gold Rush. Its Seattle-made products are so superior that each piece – be it a cold weather coat or heavy duty satchel – is guaranteed for life, and many are handed down through generations. Filson really is an American institution. The iconic Mackinaw Cruiser jacket (pictured) has been sought after by outdoorsmen since it was first patented in 1914. The classic multi-pocket utility design – it has nine pockets for storing tools, accessories and gear of all sorts – is made from durable, water-repellent, 24oz Mackinaw virgin wool. The jacket is perfect for the country landscape or the blustery urban jungle. Comfort, protection and durability never go out of style. £279,

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Appleby is one of the world’s largest providers of offshore legal advice and services. Uniquely positioned in the key offshore jurisdictions of Bermuda, BVI, the Cayman Islands, Guernsey, Isle of Man, Jersey, Mauritius and the Seychelles, as well as the international financial centres of London, Hong Kong and Shanghai. We are also the only firm to have offices in all three British Crown Dependencies. Our services include: l Corporate l Dispute Resolution l Private Client & Trusts l Property Members of the Jersey and Guernsey offices regularly advise London City and international law firms on all legal aspects of offshore corporate, finance and investment fund transactions and arrangements in the Channel Islands. For more information visit our website Michael Cushing Managing Partner, Jersey +44 (0)1534 818 395 Gavin Ferguson Managing Partner, Guernsey +44 (0)1481 755 603

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David White, Head of Tax, Guernsey E: T: 01481 717 445

Web: To advertise in the directory in print or online contact Carl Methven on + 44 (0)1534 615886 or

Hawksford is an international and awardwinning corporate, private client and funds business. Through our three core service pillars corporate, private client and funds - we are experts in providing a wide range of administration and structuring solutions across our seven international offices. We offer a comprehensive range of services to and for trusts, companies, foundations, partnerships, family offices and investment funds. We also provide listing services, wills and probate, succession planning and employee solutions. Our people are highly trained, experienced and offer impeccable client service. We are constantly evolving our thinking, seeking new and better ways of doing things, and making investments for the long-term benefit of our clients. Our independence enables us to offer creative and pragmatic solutions for a wide range of institutional, entrepreneurial and high networth clients. We have expanded our global footprint and service offering, moving into core regional markets across Europe, Asia and the Caribbean and drawing on a global network of leading professionals and advisers. For more information, please contact us: T: +44 (0)1534 740000 E: W: Steve Robinson – Director, Corporate T: +44 (0)1534 740270 E: James Howe – Director, Private Client T: +44 (0)1534 740246 E:

Intertrust is a leading global provider of high-value trust, fund and corporate services, with a network of 41 offices in 30 jurisdictions across Europe, the Americas, Asia and the Middle-East. Our 2,400 employees are focused on delivering highquality tailored services to clients with a view to building long-term relationships. Intertrust in the Channel Islands offers a comprehensive range of services to our clients and business partners wherever they may be located:l Corporate services l Private equity and debt fund services l Real estate services l Capital markets services l Performance & Reward Management l Private wealth l Regulatory and reporting services We pride ourselves on providing professional, personal and multijurisdictional services to our clients all over the world. For further information, please contact:Andrew Niles Business Development Director Intertrust Guernsey Tel: +44 (0)1 481 211 321 Simon Mackenzie Managing Director Intertrust Jersey Tel: +44 (0)1 534 504 000

A leading accountancy practice, with offices based in Jersey and Guernsey, KPMG in the Channel Islands provide audit, tax and financial advisory services. KPMG’s global network enables us to draw on our international resources and skills to meet our clients’ needs. We address complex business challenges with methodologies and processes spanning markets and national boundaries. Fundamental to KPMG’s approach is our focus on industry sectors. Our vision is simple, to turn knowledge into value for the benefit of our clients, people and capital markets. For further information please contact: Neale Jehan Head of Audit Andrew Quinn Deputy Head of Audit, John Riva Head of Tax Tony Mancini Executive Director, Tax Ashley Paxton Head of Advisory Robert Kirkby Executive Director

Keith McSorley – Funds Manager T: +44 (0)1534 740451 E:

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Directory BL Directory ONLINE DIRECTORY THE ONLINE DIRECTORY THAT WILL GET YOUR FIRM NOTICED. With a profile summary on every press release, and a historical press release archive linked to your directory entry, is the place to be

Minerva is a family owned business that has been in existence in Jersey for over 35 years.

Specialty: Bespoke IT Development & Business Consultancy

As a leading independent provider of trust, corporate and fund administration services, we focus on internationally active clients located in sub Saharan Africa, India, the GCC and Europe.

Puritas is an award-winning provider of intuitive software and business solutions for the financial services industry.

We firmly believe in the value of personal relationships and are familiar with how our clients and professional intermediaries operate from a cultural and business perspective within these regions. In addition to Jersey, we provide services from a number of offices based in key jurisdictions including London, Geneva, Mauritius, Dubai, Singapore and Amsterdam, as well as affiliate offices in Kenya, India and New Zealand. For further information, please contact:

Only ÂŁ150m per annu

TO GET YOUR FIRM LISTED IN THE DIRECTORY CONTACT CARL METHVEN +44 (0) 1534 615886 / +44 (0) 7797 796377 OR CARL.METHVEN BLGLOBAL.CO.UK 80 january/february 2017

John Wood Managing Director Minerva Trust & Corporate Services Limited PO Box 218 43/45 La Motte Street St Helier Jersey JE4 8SD Channel Islands T +(0)1534 702930 E

Specifically designed to meet the increasingly complex accounting, compliance, and reporting needs of our clients, all software features robust audit and control capabilities which can be easily updated to reflect changes in the regulatory environment. Our products include: l PureFunds - a unitized product platform specifically designed to support many different types of asset class and fund structures and help fund administrators and portfolio managers better manage investor activity l PureClient - an advanced customer due diligence/client management system which will maintain and update client records for any entity or relationship and provides the necessary transparency and look-through reporting that is needed to manage sophisticated structures l PureManager - a bespoke software package for fund and investment managers which provides for effective control, analysis, reconciliation and reporting of daily trading activity. As well as software development, our services include: l Systems integration and implementation l Programme and project management l Project and business consultancy To find out more how Puritas can help your business. Contact: Mike Feighan - Director Phone: +44 (0) 1534 874100 Email: To advertise in the directory in print or online contact Carl Methven on + 44 (0)1534 615886 or

Building trust in society and solving important problems We focus on three things at PwC in the Channel Islands: assurance, tax and advisory services. But how we use our knowledge and experience depends on what you want to achieve. So whichever one of our 320 plus staff in the Channel Islands you work with (or 208,000 people across the PwC global network of member firms), they’ll start by asking the following questions: Are you looking to build trust? Give your shareholders more value? Or do you want to do something completely different with your strategy? When we work with you we really listen, to understand you better. We’ll get to know you, your business and your goals. Then we’ll share what we’ve learned to help you get there. We want to deliver the value that you, our clients, our people and our communities are looking for. Talk to us about your issues and aspirations. For further information, please contact: John Roche, Partner, Guernsey Tel: +44 1481 752040 Karl Hairon, Partner, Jersey Tel: +44 1534 838276 Follow us: @PwC_CI

Rathbone Investment Management International is part of the award winning Rathbone Brothers PLC (“Rathbones”), which was established in 1742. Rathbones is a leading provider of discretionary investment management services for private investors, charities and trustees. We enjoy the stability afforded by being a FTSE-250 listed company with significant critical mass (£28.3 billion of funds under management as at 30 June 2015). We offer a range of tailored investment options: l Bespoke portfolio management l Multi-manager portfolios l Unitised portfolios (the RIMI Strategies Funds) Our services are delivered by a team of innovative and experienced offshore professionals based on an understanding of a client’s specific investment and risk objectives, backed-up by the performancedriven Rathbone investment process and encompass the full universe of assets. For further information please do not hesitate to contact: Jonathan Giles, Managing Director Phil Bain, Director

Viberts is dedicated to providing outstanding legal advice and customer service, both in Jersey and internationally. Our clients range from private individuals to multinational corporations, local businesses and governments. We are large enough to offer a full service but small enough that each client has direct contact with one of our partners. We always take a pragmatic approach so that we can deal with matters as efficiently as possible, but we are also compassionate and understanding when it comes to sensitive issues. We partner with other specialists across the globe where required to bring you the best possible advice and representation. Our range of bespoke legal services includes: l Commercial l Employment l Family l Litigation l Personal l Property For expert legal advice, please contact us today. E: T: +44 (0) 1534 888 666 W:

Vaughan Rimeur, Director + 44 (0) 1534 740550 Rathbone Investment Management International Limited is regulated by the Jersey Financial Services Commission

january/february 2017 81

questions with JEREMY ELLIS

Tea or coffee? Both. At breakfast, a good filter coffee or English breakfast tea. In the afternoon, it’s got to be decaf coffee or rooibos tea.

First job you had? Working in a greenhouse during the school holidays as a teenager. It was back-breaking work, starting at 6am.

Favourite movie? The Empire Strikes Back – still the best one of the series, although The Force Awakens is a close second.

Worst job you’ve done? See above!

Did you like school? I didn’t dislike it, and my memories are mostly positive. I just kept my head down, worked hard and stayed out of trouble. Most amazing place you’ve visited? The Grand Canyon – it’s stunning in its vastness. When I visited, we took a helicopter ride into the Canyon and had breakfast there. There can’t be too many more impressive places in the world to start your day.


What’s the scariest thing that’s happened to you? Apart from having children, probably when I had to evacuate an Aurigny plane at Gatwick during take-off due to smoke starting to fill the cabin. We ended up standing on the runway as 747s took off around us, not knowing if our plane was going to blow up. Definitely my scariest moment. Your best quality? I’d like to think I’m easy to get along with, but you’d have to check that with my wife.


Something about yourself you would change? The serious answer is that I believe you can always improve and develop yourself. However, if I could change something, it would have to be my footballing ‘skills’. I’d have loved to have been good enough to have played for Liverpool. Last meal on death row? Steak and truffle chips from Goodman Restaurant in Mayfair, London. Accompanied by a good bottle of Malbec. Cats or dogs? Definitely cats, although my sons would really like us to get a dog.


82 january/febRuary 2017

Most embarrassing moment? None that I can think of, but I’m sure my wife and sons would disagree!

Which famous person would you love to meet? I feel I should say an iconic world leader or a Nobel Peace Prize winner, but it would have to be my hero when I was growing up – Kenny Dalglish. Any hobbies? Golf, when I have time, and watching Liverpool FC at Anfield. Something that drives you nuts? Lots of things drive me nuts but I don’t want to come across all Victor Meldrew. That said, my real bug bear is when people use ‘bunch of’ in the wrong context – for example, ‘I’ve been in a bunch of trouble’. It’s not a bunch! That drives me mad. Best piece of advice you’ve ever been given? Be yourself. Don’t try to be someone you’re not. Can you play a musical instrument? I learned to play the bassoon when I was at school, but I gave it up after a couple of years when it clashed with playing hockey and football. Buzzword you hate the most? There are too many used too frequently to list. What do you have for breakfast? Marmite on toast, or cereal – depends what we have in the cupboard.

AHMAD FAIZAL YAHYA, Stefano Buttafoco /


Something about you people might be surprised by? Probably that I learned to play the bassoon, but also that I won prizes for poetry reading in the Eisteddfod when I was much younger. Jeremy Ellis is Audit Partner at Saffery Champness Chartered Accountants in Guernsey




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