BL Magazine March/April 2019 by BL Magazine

GLOBAL BUSINESS: A VIEW FROM THE CHANNEL ISLANDS

BUSINESSLIFE

ISSUE 61 MARCH/APRIL 2019

Onboarding customers Non-financial reporting Banking reforms • Divorce law Management structures Data protection • Remote working

calmer waters

Why substance could be good news for the Channel islands

ISSUE 61 MARCH/APRIL 2019

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the opportunity in compliance Q1 IS SHAPING UP to be a busy quarter on the compliance front. Two sets of high-profile rules came into effect on 1 January. The first – the subject of our cover feature for this issue (page 34) – are the new tax rules on substance. Based on the premise that companies incorporated in low- or no-tax jurisdictions should not be able to avoid paying tax in countries where they actually do their business, the rules require businesses tax-domiciled on the islands to demonstrate that they have real operations – or substance – here. While the rules look daunting at first glance, experts we’ve spoken to say that compliance is likely to highlight the already high levels of substance that currently exist across the islands, reinforcing their reputation as a well-regulated financial centre. So, far from being a cause for concern, it looks like the new rules spell good news for the islands, helping to showcase them as a tax domicile of choice. Banking reforms Also in force from the new year were changes brought in by the Independent Commission on Banking, the most notable of which are new rules on ring-fencing retail banking activities (page 38). Channel Islands subsidiaries of affected banks have found themselves outside the ring fence, but have turned this into an opportunity to explore new avenues of growth, using retail deposits that can no longer be ‘upstreamed’ to parent banks. That’s all, of course, against a backdrop of improved protection for savers.

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Across all areas of new regulation, we’re hearing similar messages: high levels of compliance, low levels of complacency and a chance to innovate and attract new business. They are messages that organisations such as The International Stock Exchange (TISE) are no doubt taking to market. In 2018, TISE – headquartered in Guernsey but with a presence across all three Crown Dependencies – delivered record growth in listings. Deserved recognition It’s a fantastic achievement and it was great to see Fiona Le Poidevin – the subject of our Interview (page 24) – being recognised for this growth. She was up on stage at this year’s Citywealth Powerwomen Awards in London as one of the winners of the ‘Woman of the Year – Business Growth’ category. Fiona wasn’t the only one to fly the flag for the islands at the glitzy London ceremony in February. Jersey Finance’s Lisa Springate, Fairway Group’s Louise Bracken-Smith and Estera’s Farah Ballands were among the many other CI winners. Admittedly, awards only really matter when you win them, but to see CI professionals pretty consistently on stage throughout the night is a good reminder of the talent we have on the islands and how, collectively, we punch above our weight on a global stage such as the City. We hope you’ll find plenty more food for thought elsewhere in this issue. Enjoy the read. n

Far from being a cause for concern, it looks like the new substance rules spell good news for the islands

Eila Madden, Editor-in-Chief, Businesslife

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Contents

INSIDE 14 bl guernsey

The latest financial and business news and views from the bailiwick

BUSINESSLIFE

Businesslife is published six times a year by Chameleon Group +44 1534 615886 www.blglobal.co.uk

CEO, CHAMELEON GROUP Carl Methven carl.methven@blglobal.co.uk EDITOR-IN-CHIEF Eila Madden ART DIRECTOR Angela Lyons SUB EDITOR Kate Wheal ADVERTISING sales@blglobal.co.uk NEWS AND EDITORIAL news@blglobal.co.uk GENERAL ENQUIRIES enquiries@blglobal.co.uk

38 7 News

38 banking reforms

A round-up of the latest Channel Islands business news

Jersey and Guernsey are left outside the retail banking ring fence

12 Appointments

41 corporate reporting

The latest people moves in Guernsey and Jersey

24 Interview Fiona Le Poidevin, CEO of The International Stock Exchange Group, on not being complacent

30 know your customer Pain-free onboarding is in sight, thanks to emerging technologies

Non-financial reporting starts to get serious attention

46 divorce law Jersey consults on changing its 70-year-old divorce law

60 52 management structures

18 bl Jersey

What’s behind the recent explosion in unusual job titles?

56 data protection One year on from GDPR, companies should gear themselves up for the transitional relief deadline

60 remote working The pros and cons of virtual teams

A review of the main business developments and finance news stories

65 The knowledge

34 substance

78 20 questions

New tax rules should enhance the Channel Islands’ reputation for being well regulated

Rossborough Group’s James Anderson on running marathons and growing up

Find out how to brainstorm and achieve ‘inbox infinity’, plus top tech from CES

contributors The BL Global Discussion Forum

PAUL BRYANT

Follow us @blglobalnews Office: Meadowlands, La Rue a la Dame, St Saviour, Jersey JE2 7NQ © 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.

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New to Businesslife, business and investment writer Paul is the Founder and Director of Canbry Research. In his first article for us, he dares to dream about a Know Your Customer utopia.

DAVID BURROWS

Businesslife regular David wonders whether Jersey’s proposed new divorce laws will really lessen the financial heartache of splitting up. Elsewhere, he finds out remote working isn’t always so much fun.

PHIL THORNTON

Phil, Founder of consultancy Clarity Economics, is another new addition to Businesslife’s team of writers. In this issue, he walks us through Sir John Vickers’ retail banking reforms.

RICHARD WILLSHER

For our cover story this issue, Richard navigates the tricky waters of new tax substance legislation and finds out that Channel Islands firms are already pretty well geared up to meet these tough new requirements.

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Islands among world’s best places to work

EXPATS PURSUING CAREERS in Guernsey, Jersey and the Isle of Man benefit from a better work culture, work/life balance, job security and earnings prospects than in many other locations around the world, according to newly analysed data from HSBC. Fresh analysis of HSBC’s latest Expat Explorer Survey, launched in November 2018, looks at career opportunities in key expat markets. The survey of more than 22,000 expatriates around the world reveals that career ambition is the number one reason why people settle abroad, and that Germany is top of the list for those looking to further their careers, ahead of Bahrain and the UK. With the methodology requiring at least 100 respondents from each country included, figures from Guernsey, Jersey and the Isle of Man were incorporated into the UK data for

the overall report. However, by combining responses from the islands separately, the data found that the Channel Islands and the Isle of Man score well against international benchmarks. In particular, the survey found that 77% of expats on the islands say their work/life balance is better than in their home country (26% above the global average), whilst 58% consider the work culture is better than their home country (10% above the global benchmark). The analysis suggests that working as an expat on the islands is also financially rewarding, with 63% saying their earnings prospects are better than in their home country (13% higher than the global average), whilst 61% of expats feel that job security is better in the islands (23% better than the average globally). n

TISE receives SEC recognition THE INTERNATIONAL STOCK Exchange (TISE) has been approved as a Designated Offshore Securities Market (DOSM) by the US Securities and Exchange Commission (SEC). The recognition from the federal regulator means that securities listed on TISE can be issued and resold in a more streamlined manner. Fiona Le Poidevin, CEO of The International Stock Exchange Group (TISEG), said: “This approval is a significant endorsement of the standards of governance by which we operate our market and adds further credibility to TISE as a leading international stock exchange.” The SEC recognition means that securities

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listed on TISE can be issued outside the US without the need for them to be registered with the SEC. TISE membership also gives the seller exemption from having to undertake onerous requirements to demonstrate that the buyer is outside the US. “Our issuer base already includes US companies issuing corporate debt and highyield bonds,” Le Poidevin added. “We expect that this recognition will be particularly attractive to those types of firms, as well as other issuers looking for a more streamlined approach to compliance with US securities legislation.” n For more on TISE, see page 24

Guernsey to Heathrow flights announced EUROPEAN REGIONAL AIRLINE Flybe has announced that it will start operating a direct daily flight between Guernsey and Heathrow airport from 31 March. It is understood that the Heathrow link will be a trial for seven months from the end of March to the end of October. For the first time in 20 years, this will provide the island with a connection to London’s largest airport and to the numerous onward links available via the UK’s busiest international hub. Despite being one of the world’s foremost international finance centres and a popular tourist destination, Guernsey has not had a fast, convenient connection to Heathrow since the late 1990s. Charles Parkinson, President of the Committee for Economic Development for the States of Guernsey, commented: “We are delighted that Flybe is announcing the launch of this new daily service, the sixth new air route launch since our Open Skies policy went live in September 2018. “This new Heathrow service will not only provide much improved connectivity for Guernsey’s residents and visitors, but it will also help in the development of the Guernsey economy and in raising Guernsey’s international reputation and profile.” He added: “Flybe will receive support in the form of discounted landing fees from Guernsey Airport and a route development subsidy.” n

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News

EU agrees new investment fund market rules THE EUROPEAN PARLIAMENT and EU member states have agreed on new rules to make it easier, quicker and cheaper for EU asset managers to sell funds to a wider range of investors. In turn, investors across the EU will have access to a much larger choice of fund products at better value. European Commission Vice-President Valdis Dombrovskis said: “The agreement will cut red tape and improve clarity for fund managers who want to market their products across the EU. This will lead to more choice for investors, at lower costs – an important milestone for the capital markets union. We want fund managers based in Milan to be able to easily offer their funds in Riga, without compromising on investor protection.” The EU says investment funds are an important tool to channel private savings into the economy and increase funding possibilities for companies. The EU investment funds market totals €14.3 trillion. This market has not yet achieved its full potential – 70% of the total assets under management are held by investment funds authorised or registered for distribution only in their domestic market. Only 37% of undertakings for collective investment in transferable securities (UCITS) and about 3% of alternative investment funds (AIFs) are currently registered for distribution in more than three member states. This is partly due to regulatory barriers hindering crossborder distribution of these funds. The EU says the new agreement will remove some of these barriers, making cross-border distribution more transparent, while removing overly complex requirements and harmonising national rules. The political agreement will be followed by further work before the European Parliament and Council formally adopt the texts. n

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Done Deals An Ogier team has advised Japan’s Takeda Pharmaceutical on its £46bn acquisition of Shire, which forms one of the world’s largest pharmaceutical firms. Ogier advised on the Jersey law aspects of the deal, which was affected by way of a scheme of arrangement in Jersey, working alongside lead bidder counsel Linklaters. Simon Dinning, Global Head of Corporate, led the team, supported by Senior Associate Kevin Grové, while Nick Williams, Head of Dispute Resolution in Jersey, was assisted by Senior Associate James Angus. Also acting for Shire was Mourant, led by Partner Robert Hickling. Mourant managed the scheme process and acted as Jersey counsel alongside lead counsel Slaughter and May. Collas Crill has assisted investment manager Peregrine Guernsey with the migration from Bermuda of the CAM Bastion master-feeder collective investment scheme. The $155 million scheme comprises a master fund, which operates as a fund-of-hedge-funds, and four feeder funds offering US dollar and South African rand hedged share classes. Until migration, it was registered and regulated as a collection of ‘standard’ funds in Bermuda. On migration, the funds were authorised by the Guernsey Financial Services Commission as Class B open-ended collective investment schemes. The Collas Crill team, led by Senior Associate Gareth Morgan, included Group Partner Paul Wilkes and Associate Annabel Bishop. Appleby has advised Santander on the transfer of its banking businesses in Jersey and the Isle of Man. The businesses of Santander UK’s Jersey branch and Isle of Man branch were transferred into the respective Jersey and Isle of Man branches of Abbey National Treasury Services, following a transfer scheme in each jurisdiction that has received court sanction. The Jersey team consisted of Partners Wendy Benjamin, Michael Cushing, David Dorgan, Tim Hart and Richard Sheldon, supported by Senior Associate Gemma Whale, Associate Dilly Wright and Paralegal Angharad Prescott. Mourant has advised Elm Bidco, which is controlled by affiliates of New York-based Further Global Capital Management, on its takeover of AIM-listed GBGI, a global provider of international benefits insurance.

Trading principally as GBG Insurance Group, it offers services from policy sales to claim administration. The takeover of GBGI was undertaken by way of a Guernsey scheme of arrangement. The aim of the takeover was to return GBGI to private ownership, to enhance its financial and operational flexibility and save on costs from being a public company. Guernsey Partners John Rochester and Abel Lyall led the Mourant team, with assistance from Counsel Alex Davies and Associate Peter Callus, alongside lead onshore counsel Dechert in London and New York. JTC has provided corporate services to cryptocurrency exchange Binance for the launch of its Jersey platform, while Carey Olsen provided legal and regulatory advice. Binance Jersey will provide secure sterling and euro to cryptocurrency (Bitcoin and Ethereum) exchange, giving investors easy access to the evolving cryptocurrency market and an alternative to standard currency (fiat) exchange. JTC provided specialist services to ‘incubate’ Binance Jersey ahead of its live launch, as well as director, administration, accounting and bookkeeping services. The Carey Olsen team was led by Partner Chris Griffin, assisted by Holly Brown, Daniel Burridge and Tarina Le Boutillier. Counsel Huw Thomas and Adele Browne advised Binance on the data protection elements involved. Guernsey and London teams from MJ Hudson have advised NextEnergy Capital on the first close of its private equity fund NextPower III. The solar energy fund secured initial commitments of $160 million. NP III’s investment strategy is to invest in new-build solar photovoltaic projects internationally and is expected to build a diversified portfolio comprising up to 150 solar PV plants. NP III will typically commit equity of $5 million to $30 million per solar PV plant. MJ Hudson Law provided legal advice from Guernsey and London, whilst MJ Hudson IR & Marketing Solutions advised on the private placement memorandum and investor pitch documents. Eamon Devlin and Edyta Brozyniak led MJ Hudson’s legal team, with support from Rabie Abas and Matt Wrigley in Guernsey and Shervin Shameli, Daniel Lewin, Chris Dearie, Sam Burford, Ross Manton and Peter Mallon in London. n

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News

We believe in building successful, long-term relationships. We are Butterfield.

At Butterfield, we specialise in assembling the best people, products and services to create bespoke financial solutions for wealth management and the financial intermediary market. It is a skill Butterfield has honed over 160 years in banking. Although much has changed over that period of time, our core values, entrepreneurial spirit and unrelenting focus on our clients’ needs, remains at the heart of everything we do.

Butterfield Bank (Guernsey) Ltd PO Box 25, Regency Court, Glategny Esplanade, St. Peter Port, Guernsey GY1 3AP www.gg.butterfieldgroup.com

To find out more about Butterfield’s personalised wealth management services, please contact one of our Business Development Advisers: GUERNSEY +44 (0)1481 711521 or e-mail Guernsey@butterfieldgroup.com JERSEY +44 (0)1534 843333 or e-mail Jersey@butterfieldgroup.com

Butterfield Bank (Jersey) Ltd PO Box 250, St. Paul’s Gate, New Street, St Helier, Jersey JE4 5PU www.je.butterfieldgroup.com

THE BAHAMAS • BERMUDA • C AYMAN ISL ANDS • GUERNSEY • JERSEY • SINGAPORE • SWITZERL AND • UNITED KINGDOM Butterfield Bank (Guernsey) Limited (“BBGL”) is licensed and regulated by the Guernsey Financial Services Commission (“GFSC”) under the Banking Supervision (Bailiwick of Guernsey) Law, 1994, The Protection of Investors (Bailiwick of Guernsey) Law, 1987 and the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc (Bailiwick of Guernsey) Law, 2000, each as amended from time to time. Company Registration No. 21061. BBGL is a participant in the Guernsey Banking Deposit Compensation Scheme. The Scheme offers protection for ‘qualifying deposits’ up to £50,000, subject to certain limitations. The maximum total amount of compensation is capped at £100,000,000 in any 5 year period. Full details are available on the Scheme’s website www.dcs.gg or on request. Butterfield Trust (Guernsey) Limited (“BTGL”) is licensed and regulated by the GFSC under the Regulation of Fiduciaries, Administration Business and Company Directors, etc, (Bailiwick of Guernsey) Law, 2000, as amended. Company registration No 31645. BBGL and BTGL are both registered under the Data Protection (Bailiwick of Guernsey) Law 2017 and are registered for the purposes of The Companies (Guernsey) Law 2008. Their registered office is P.O. Box 25, Regency Court, Glategny Esplanade, St Peter Port, Guernsey GY1 3AP. Butterfield Bank (Jersey) Limited (“BBJL”) is regulated by the Jersey Financial Services Commission to conduct deposit taking business under the Banking Business (Jersey) Law 1991 (as amended), investment business, fund service business and money service business pursuant to the Financial Services (Jersey) Law 1998, (as amended). BBJL is registered under the Data Protection (Jersey) Law, 2018 and is registered with the Jersey Registrar of Companies for the purpose of the Companies (Jersey) Law 1991 (as amended). BBJL’s registered office address is St Paul’s Gate, New Street, St Helier, Jersey JE4 5PU. Company registration number 124784. BBJL is a participant in the Jersey Bank Depositors Compensation Scheme. The Scheme offers protection for eligible deposits of up to £50,000. The maximum total amount of compensation is capped at £100,000,000 in any 5 year period. Full details of the Scheme and banking groups covered are available on the States of Jersey website www.gov.je/dcs, or on request. BBGL, BTGL and BBJL are wholly-owned subsidiaries of The Bank of N.T. Butterfield & Son Limited. Photo by Lachlan Dempsey on Unsplash.

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CICRA publishes 2019 work programme THE CHANNEL ISLANDS Competition and Regulatory Authorities (CICRA) has published its work programme for this year. The programme covers its three areas of work as the economic regulator in the Jersey and Guernsey telecoms sector, and the Jersey postal and ports sectors. It also covers its role in competition law enforcement across the two islands. Among CICRA’s top priorities for 2019 are developing a telecoms regulatory framework to support policy ambitions in each island for next-generation connectivity; improving prospects for innovation; and reviewing whether wholesale pricing of broadband is based on a fair return. As the economic regulator of Ports of Jersey since its commercialisation, the main areas of its work will be maintaining transparency of quality of service achieved by Ports of Jersey and setting a longterm pricing framework for the airport and harbour operations where Ports is the monopoly provider. Ensuring certain mergers or acquisitions do not lead to unacceptable risks to consumers from market concentrations when competitors acquire each other is a key area of CICRA’s work in competition law enforcement. The authority also carries out a number of investigations on a confidential basis, publishing decisions following due process – though in many cases these are resolved before formal action is required. In addition, CICRA maintains a watching brief on the postal sector and regulates by exception. n

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MERGERS AND ACQUISITIONS Link Asset Services, which has offices in Jersey, is to sell the majority of its Corporate and Private Client Services (CPCS) business to Apex Group. The sale is subject to regulatory approvals and completion is expected by 30 September. The acquisition increases Apex’s global assets under administration to nearly $600bn and adds to its corporate services capabilities with specialist hubs in the UK, Jersey, Ireland, Luxembourg, the Netherlands, Hungary and Switzerland. Anthony O’Keeffe, Chief Executive of Link Asset Services, commented: “Link Group is committed to investing in our other three core businesses – Link Market Services, Fund Solutions and Banking & Credit Management. With the trust and corporate services market undergoing change, we believe Apex has the right focus to fully unlock CPCS’s potential.”

Corporate, trust and professional services provider SMP Group, which includes Jersey-based SMP Partners, has announced a management buyout, subject to regulatory approval, as part of a leadership succession strategy. The group was created in 2007 through a management buyout from Fortis Intertrust, and has grown into an international provider with seven offices around the world. David Hudson, formerly the group’s Business Development Director, has been named as the group’s new CEO.

Apex Group has also completed the acquisition of private equity administrator Ipes, which was first announced last June. The acquisition adds $165bn in assets under administration to the group’s portfolio and strengthens its position as a global private equity fund administrator. The close of the Ipes deal follows a succession of announcements from Apex, including confirmation of its acquisition of MM Warburg & Co’s asset management and servicing business in Luxembourg and the recent announcement of Apex’s custody offering via a partnership with Citi.

LSE-listed investment trust company Caledonia Investments has agreed to acquire a significant minority stake in family office firm Stonehage Fleming. The transaction has been approved by both boards and by Stonehage Fleming shareholders, and completion was expected early this year. Caledonia’s investment in Stonehage Fleming will represent approximately 36.7% of the firm’s equity, with management and staff remaining the largest shareholders with approximately 50%. As a strategic minority investor, Caledonia will provide resources and expertise to accelerate the business’ growth organically and through acquisition, enhancing Stonehage Fleming’s position in the family office and ultra-high-net-worth market. Stonehage Fleming will be led by the current management team, with the current partners continuing in their roles. Two members of the Caledonia investment team will join the board.

Further to an announcement last year, the Hatstone Group and Folio Group have received regulatory consent to merge the two businesses. The new group has more than 50 employees providing a wide range of legal, corporate and fiduciary and fund administration services. The merger creates a new group that retains the Hatstone name and will operate from offices in the British Virgin Islands, Jersey, London, Malta, Panama and South Africa. Hatstone started business in Jersey in 2011 and has operated from offices in London, Panama and South Africa. Folio was founded in 2001 in the British Virgin Islands and had offices in Malta and Panama. It specialises in establishing and administering funds, trusts and business companies and providing fiduciary services.

Business services provider TMF Group and State Street Corporation have jointly announced a definitive agreement for TMF Group to acquire State Street’s Private Equity and Real Estate (PERE) fund servicing business, which operates from the Channel Islands. According to TMF, the acquisition marks a key milestone in the group’s efforts to grow its PERE fund administration business. After the deal, TMF Group’s assets under administration will exceed $125bn for PERE clients. In Jersey, the acquisition will add fund administration to its existing corporate and trust services, whilst in Guernsey, it will complement the recent acquisition of fund administration business Gentoo. Completion of the transaction is subject to regulatory approval in Jersey and Guernsey. n

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www.pwc.com/jg/cyber

Cyber security is not a game

PwC Channel Islands understands that managing cyber risk effectively isn’t just a technology issue. It’s a combination of people, process and technology. We look at all three aspects to bring you an independent expert view on your cyber vulnerabilities and how to manage them. Protect what matters to you. Visit www.pwc.com/jg/cyber or email oliver.delafosse@pwc.com in Guernsey or david.carney@pwc.com in Jersey.

© 2019 PricewaterhouseCoopers CI LLP. All rights reserved. “PricewaterhouseCoopers” and “PwC” refer to the Channel Island firm of PricewaterhouseCoopers CI LLP, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. PricewaterhouseCoopers CI LLP, a limited liability partnership registered in England with registered number OC309347, provides assurance, advisory and tax services. The registered office is 1 Embankment Place, London WC2N 6RH and its principal place of business is 37 Esplanade, St. Helier, Jersey JE1 4XA.

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Appointments Caroline Prow (pictured) has been named Managing Director of Equiom (Guernsey). Caroline has held senior roles in banks, fiduciary companies and family offices in London, Guernsey, Jersey and Barbados. She joins Equiom having served as Managing Director Family Office and Group Compliance Manager at the DGM Group of Financial Companies in Barbados for eight years. In addition, Equiom has promoted Aidan Davin from the role of Managing Director in the Isle of Man to Chief Operating Officer for Jersey, Guernsey and the Isle of Man. Nina Johnston, who joined Equiom in 2005, takes over as Isle of Man MD.

David Le Boutillier (pictured) has been promoted to Managing Director of Praxis Fund Services in Guernsey. David joined PraxisIFM in 2007, prior to which he worked for Close Fund Services. Before his recent promotion, he served as Operations Director at PraxisIFM, responsible for the fund administration and shareholding services team. Also within the Guernsey Fund Services team, Keri Lancaster-King has been promoted to Associate Director, while Tom Strawbridge in the Private Client and Corporate division has been promoted to Senior Trust Manager, having been with the company for 10 years.

HSBC has appointed Christopher Jones as Head of Trust Relationship Management for Private Wealth Solutions in the Channel Islands, based in Jersey. Christopher, who previously worked in HSBC’s private banking business in Hong Kong, will oversee the delivery of succession planning solutions to high-net-worth and ultra-high-net-worth clients. Having worked at HSBC for 13 years, Christopher joined the relationship management platform in 2015, after spending five years in Hong Kong in the family governance and wealth planning teams. He previously held positions with the bank in Taiwan and London.

Bridget Barker has been appointed as Director of Zedra Fund Managers (Guernsey). Bridget joined Zedra in March 2017, having spent most of her career with London law firm Macfarlanes, including 28 years as a Partner within its Investment Funds and Financial Services Group. She is based in London but works closely with the funds team in Guernsey and Jersey. As well as supporting Zedra’s corporate and fund services, Bridget has been leading new business initiatives and representing the firm at networking events. She has spent many years specialising in private equity, real estate and credits funds.

Altair has appointed Jon Trigg as a Director within its Jersey office. His portfolio contains a mix of alternative investment funds investing in private equity, real estate and debt strategies. Jon joins from Moore Management, where he has spent the past five and a half years, most recently as Head of Global Fund Services with responsibility for the firm’s global strategy. With almost two decades of international financial services experience, Jon has also held private equity roles at State Street, where he was a Vice President, and at UBS. He is also a Director on multiple fund boards.

Intertrust has appointed Simon Mackenzie – who has served as Managing Director of Intertrust in Jersey for the past two years – as Chair of its newly formed Channel Islands executive leadership team. In addition to his existing role overseeing the Intertrust brand in Jersey and building on the firm’s fiduciary services business, Simon will now lead the executive team, which will allow the Jersey and Guernsey teams to work more closely together. He will be supported in his new role by Marie McNeela, who was recently promoted to Managing Director of Intertrust within Guernsey.

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Daniel Bisson is now Managing Director of Nedgroup Trust, the Channel Islands-based trust and corporate services business of Nedbank Private Wealth. Daniel will be responsible for leading the team to grow the international trust business across Guernsey and Jersey. Based in Guernsey, Daniel has more than 20 years’ experience in the global fiduciary and corporate sector. Most recently, he was Vice President, Wealth Structuring, at Butterfield Trust (Guernsey). Prior to this, he spent nine years with RBC Wealth Management International, where he held senior roles, including MD of Wealth Preservation and Family Governance.

Jersey Finance has appointed Allan Wood Head of Business Development in the western regions, Elliot Refson Business Development Director for funds, and Robert Moore Business Development Director for the UK. Allan (pictured), who joined Jersey Finance in 2015, previously led the Jersey International business in Barclays’ Wealth and Investment Management division. Elliot rejoined Jersey Finance in November 2018, after two years as a Director at Crestbridge. Robert previously served as a Client Director in the Alternative Investment Division of Ocorian, and has spent eight years with Garfield-Bennett Trust Company.

Jennifer Carnegie has been named the Jersey Chamber of Commerce’s new Vice President, taking over from Mark Cox in May. Jennifer currently serves as a Director of leadership consultancy Amicus, prior to which she spent 20 years in global corporations. She has been Chief People Officer for telecomms provider Digicel, managed manufacturing facilities, is an industrial engineer and helped set up a corporate university for Mars Incorporated. In addition to Amicus, Jennifer is on the boards of the Channel Islands Cooperative Society and Jersey Business, and is a Jersey Appointments Commissioner.

Vistra has named Clive T Wright (pictured) as Managing Director of Vistra Jersey and Jane Pearce as Managing Director of the UK, Ireland and Channel Islands. Clive has held senior roles at Kleinwort Hambros, Deutsche Bank, Royal Bank of Canada and HSBC in the Channel Islands and globally. Most recently, he was Head of Private Wealth Management in the Channel Islands and Deputy Head of Private Banking at Kleinwort Hambros. He succeeds Jane, who moves to the newly created Managing Director role. She has been with Vistra since 2015, having previously worked for Ogier, Kleinwort Benson, Aztec Group and Deutche Bank.

The Jersey Financial Services Commission (JFSC) has sworn in Tracy Garrad for a five-year term as a Commissioner on its board. A former Chief Executive Officer of HSBC Channel lslands and Isle of Man, Tracy’s career spans 14 years in nonfinancial services and 17 years in banking, including being the first female CEO to lead First Direct UK. In January, she became the CEO of AXA PPP healthcare. Tracy brings to the JFSC board experience across a wide spectrum of international markets and regulatory regimes, spanning the Channel Islands, UK, Europe and the Middle East.

Corporate and yacht services provider Fiduchi has promoted Paul Coundley to its board as Director of Operations. Having joined Fiduchi in July 2017 as Head of Operations and Risk, Paul has overseen Fiduchi’s support functions, including its compliance, IT and client accounts teams. A Chartered Accountant, Paul has built a strong background in operations, finance, risk, compliance and client service delivery within the fiduciary industry. He previously worked for the Jersey Financial Services Commission in the supervision of trust company businesses.

FINDING THE BEST BRAINS IN THE BUSINESS, WE CALL IT RESOURCING EXCELLENCE. www.blglobal.co.uk l 2017 13 W W W . K E N D R I C K R O S E . C O M I N F O @ K E N D R I C K R O S E . C O M 0 1 5 3 4 7 1 march/apri 5 150

BL guernsey Private equity business at record levels

he value of private equity business in Guernsey reached its highest level at the end of September 2018, according to the latest fund statistics from the Guernsey Financial Services Commission. The regulator confirmed that the net asset value of private equity funds in the island passed £120bn for the first time in the third quarter of 2018. “We continue to see strong inflows of new managers establishing structures here, taking advantage of City-experienced legal

advisers, regulatory optionality and the ability to get transactions completed on time,” said Craig Cordle, a Guernseybased Partner at law firm Ogier. “Traditional private equity has broadened demonstrably over the short term – private equity means something different to everyone, but the mechanics and structuring remain largely unchanged. Guernsey continues to provide a cost-effective service to new and existing clients.” n

La Grande Mare Hotel changes hands

Image: VisitGuernsey

a Grande Mare Hotel in Guernsey has been bought by Stephen Lansdown, the co-founder of financial services firm Hargreaves Lansdown. Sold as a going concern, the four-star hotel, self-catering, timeshare and golf resort was originally developed by the Vermeulen family and has been operated by them for more than four decades. Lansdown, who is a member of the hotel’s golf club, purchased the property via Pula Investments, the investment vehicle he owns with his wife, Margaret Lansdown. Two separate cross-departmental teams from Collas Crill facilitated the sale. Partner Jason Green, Head of the Guernsey property team, supported by Senior Associate Tristan Ozanne and Conveyancing Manager Adrian Northey, acted on behalf of Pula Investments. Sean Cheong, Collas Crill’s Partner and Head of the Banking and Finance team, represented the sellers – the Vermeulen family – supported by Group Partner Michael Morris, Associate Annabel Bishop and trainee solicitor Harry Round. n

14 march/april 2019

New laws on smart contracts drafted

uernsey has drafted new laws to offer certainty in the use of electronic agents in transactions and contract matters, and to create a secure environment for the exploitation of technology for specialist financial services. The Electronic Transactions (Electronic Agents) (Guernsey), 2019, Ordinance aims to offer greater certainty in the use of artificial intelligence and distributed ledger technology, and to encourage adopters of technology solutions to use Guernsey. The law will allow the formation of a contract through the interaction of electronic agents, on the presumption that natural persons intended to create a legally binding contract. It will also cover interactions between an electronic agent and a natural person. Electronic agents will be able to be involved in transactions in several ways, without revoking the legal validity of a contract. These legal developments build on Guernsey’s existing electronic transactions legislation, which dates back to 2000, in offering express confirmation that so-called smart contracts – where computer code carries out a task in response to information received, without further human input – will be legally recognised. The laws of most jurisdictions do not yet explicitly address electronic agents, so the move marks an important development in progressing the island’s digital ambitions and positioning Guernsey law as the international law of choice for those seeking to use smart contract technology. n

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We get straight to the point, managing complexity to get to the essentials. Every piece of work is a collaboration. We listen actively, asking the right questions, focused on what really matters. We deliver targeted, pragmatic advice with absolute clarity. To the point. Legal Services British Virgin Islands Cayman Islands Guernsey Hong Kong Jersey London Luxembourg Shanghai Tokyo

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Visitor numbers increase during Q4 2018

he total number of staying visitors in Guernsey rose by 5% in Q4 2018 compared with the same period in 2017 (+1,810 visitors), according to Guernsey’s Office of the Committee for Economic Development, with the number of visitors staying for leisure purposes rising by 10%. Total departing visitors (including cruise passengers and visiting yachtsmen) stood at 44,122 during the quarter, a decrease of 2.5%. This fall was due to a cruise ship cancellation in the quarter, caused by poor weather conditions, along with fewer visitors from yachts visiting between October and December. Total departing visitors excluding cruise passengers and visiting yachtsmen remained stable at 43,581 – with a slight increase of 110 visitors compared with the fourth quarter of 2017. For the 2018 full calendar year, total visitors increased slightly – to 420,140 (+639) versus January-December 2017. This was driven by a strong growth in cruise passengers of 10% (+10,688). Excluding passengers on cruise ships and visiting yachts, there were 280,475 departing visitors, a decrease of 3% (-9,270 visitors) compared with 2017. This

was mainly caused by a fall in passengers travelling by ferry of 9% (-8,984 visitors) across the year. Deputy Dawn Tindall, a member of the Committee for Economic Development, commented: “Early indications for the 2019 season are positive, with tour operators claiming that forward bookings are 20% higher on average than the same period last year. “It is good to see positive signs of recovery in the last quarter of the year, with the number of high-value staying visitors showing healthy growth, along with an

increase in French visitors compared with the last quarter of 2017. “Despite the total volume of air travel (residents and visitors) seeing a decline in 2018, it is encouraging the volume of visitors travelling by air remained stable. “The Open Skies policy introduced in 2018 has borne fruit with the introduction of new air routes into Guernsey planned for 2019, including services from Liverpool and Southend from Flybe, Bournemouth and Edinburgh from Loganair and a new seasonal service from Groningen in the Netherlands from Sunair.” n

guernsey Open market activity reaches 11-year high

ales activity in the Guernsey open market last year was at its highest level since the financial crisis, according to Unusualities of Guernsey, an independent compiler of local conveyancing statistics. Figures reveal that there were 75 open market transactions in 2018, compared with 48 in 2017 – the first time since 2010 that more than 50 open market properties have been sold during the course of a year. However, this is still some way short of pre-financial crisis levels, when 101 and 96 open market properties were sold in 2006 and 2007 respectively. Of the 75 open market transactions completed during 2018, the median price (realty only) of the 67 houses sold was £1,256,250, up from £852,125 recorded in 2017. The eight open market flats sold in 2018 had a median price (realty only) of £1,184,063. Jason Morgan, head of Carey Olsen’s property group in Guernsey, commented:

16 march/april 2019

“The sales figures for last year should demonstrate that Guernsey remains an attractive destination for new residents. “Although there has been some softening of asking prices on the open market, it is encouraging that activity levels have improved so dramatically. “If such levels are sustained in 2019 – and there are encouraging signs that they will be – that must bode well for an increase in sales prices going forward.” In December 2018 alone, 17 open market houses and flats were sold in Guernsey, which is higher than any monthly total recorded during the buoyant 2006 and 2007 period. “This may have been the consequence, in small part, of the anticipated increase

in document duty on 1 January,” Morgan said. “But it’s more to do, we believe, with the widely predicted negative impact of an unsatisfactory Brexit outcome and the political upheaval in the UK that’s likely to follow.” n

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BL jersey Jersey Finance names new CEO

JFSC joins Global Financial Innovation Network

ersey Finance has appointed financial services professional Joe Moynihan as its new CEO. Moynihan started in his new position on 18 February, taking over from Geoff Cook, who left after 12 years in the role. “The team at Jersey Finance has done an excellent job in establishing Jersey as one of the world’s leading international finance centres and I’m excited to have the opportunity to help lead the industry at this pivotal time for international financial services,” Moynihan said. Gunther Thumann, Chairman of Jersey Finance, added: “Joe has considerable experience in financial services, here in Jersey and in markets around the world, and benefits from having had both an industry and government perspective. His strategic insight into international financial services will be vital as we look to continue to provide innovative solutions and certainty to investors.” An experienced financial services professional with a longstanding career in Jersey in the private and public sector,

T Moynihan spent the majority of his executive career with AIB bank, latterly as the Chief Executive Officer of the Jersey and Isle of Man offices. He then spent just under four years with the Jersey Government as Director of Financial Services, with a remit that was later expanded to include Digital and Competition. More recently, he has been the Chief Executive of RAK International Corporate Centre in the UAE and has acted as a consultant in Jersey and overseas. He is a previous Chair of the Jersey Bankers Association and a regular commentator on industry issues. n

Regulator announces priorities for 2019

he Jersey Financial Services Commission (JFSC) has announced its priorities for the coming year with the launch of its 2019 Business Plan. The regulator has re-emphasised its commitment to maintaining the island’s reputation as a first-class international finance centre. JFSC Chairman Lord Eatwell commented: “We face uncertain times, particularly with the UK’s likely departure from the EU this year. One of our statutory objectives is to pursue the best economic interests of the island and I believe the only way this can be achieved is by enhancing our reputation as a well-regulated

18 march/april 2019

jurisdiction. That can only be realised if regulator, government and industry work together.” Mitigating the greatest perceived risks, improving interactions with industry and the general public, facilitating market access for Jersey, and ensuring the JFSC remains independent and efficient are all key priorities for 2019. In particular, the regulator will be focusing its efforts on maintaining its anti-money laundering supervisory capacity to meet global best practice standards, and delivering strategic and legislative developments in the Companies Registry. n

he Jersey Financial Services Commission (JFSC) has joined the Global Financial Innovation Network (GFIN), which was formally launched at the end of January. The GFIN is an international group of 29 financial regulators and related organisations that are open to interacting with innovative businesses. Spearheaded by UK regulator the Financial Conduct Authority, the network has been set up to give regulators a forum to collaborate and share their experiences and approaches to dealing with emerging technologies. The Guernsey Financial Services Commission was one of the 12 founding members of the network and is part of its Coordination Group. GFIN also offers businesses a new and practical way to work with financial regulators to scale new products, services and business models. It provides these companies with the ability to test different innovations simultaneously in multiple countries, which will give real-time insight into how a product or service might work in a particular market. Mike Jones, JFSC Director of Policy, said: “Being part of the network will allow us to further understand the technologies that are being developed and trialled, not just in the island but elsewhere, and we will seek to support these businesses and their new ideas where we can, providing it’s in the public’s best interest.” To mark the launch of GFIN, the member regulators are inviting tech companies to take part in a pilot to test their innovations across various different jurisdictions. Businesses wanting to take part in the six-month trial will need to ensure that their proposed activities meet the eligibility criteria for the jurisdictions where they want to test. n

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Regulatory information is available at estera.com

BL Jersey

Digital Jersey to develop ‘digital twin’ of Jersey farmland

st helier office take-up at record high

O D

igital Jersey and agricultural science research centre Rothamsted Research have signed an agreement to create a pilot virtual model of Jersey that will help to advance global understanding of sustainable agriculture. The memorandum of understanding signals the start of work on a ‘digital twin’ of two farmed catchments on the island, which will include layers of data and simulations that can be used by policymakers to find long-term solutions to the world’s growing concerns about the future of agriculture. Rothamsted Research Professor John Crawford said: “The world’s food systems

host problems that have the potential to affect every person on the planet. By digitally testing a range of theories in a controlled environment, supported by detailed data and Digital Jersey’s excellent relationships with industry and government, we hope to fasttrack our work.” Representatives of Digital Jersey, Rothamsted Research, University College London, the Jersey Royal Company, Jersey Dairy, Jersey Water, potato producer Albert Bartlett, the Cooperative Society, Virtex and government departments have formed a project management team to oversee the work, which was due to begin in February. n

ffice occupational take-up in St Helier reached a record high in 2018, with around 250,000 sq ft of stock being let, according to recent research by D2 Real Estate. Given this increase, the total office vacancy rate has fallen significantly and is now below the historic average. The conversion of vacant obsolete office stock to alternative uses has also played a significant part in the falling vacancy rate. In the prime market, there is now little space left to let, and the majority of space in buildings under construction is pre-let, so the short-term supply chain is thin. The quality of the remaining stock is increasing, reports D2. Until recently, around 5% of the stock was rated under BREEAM, the construction standard for sustainable buildings, but this has risen to 20% of total stock, following developments such as IFC and Gaspé House. n

RBS international reports 22nd year of profit

jfsc reports Q2 NPPR uptick

ersey-based RBS International reported a profit for its 22nd consecutive year when it announced its annual results for 2018 in February. The bank returned a pre-tax operating profit of £336 million. Income was up 53% on the year, largely due to the opening of two new offices in Luxembourg and London to support the funds sector and bringing NatWest Trustee and Depositary Services into RBS International Holdings. The changes are part of a reorganisation of the bank to comply with new laws on ring-fencing retail banking activities across the UK’s five largest banks, including RBS International’s parent company, Royal Bank of Scotland. “Our 2018 financial results reflect four

20 march/april 2019

years of hard work to build a strong and sustainable bank,” commented Andrew McLaughlin, CEO of RBS International. “We’ve invested heavily in our service proposition and we’ve grown our funds business through investment in the UK and Europe. “We’re excited to be going into 2019 as a standalone bank outside of the ring fence. We still have a long way to go, but our new three-year strategy will help us achieve our ambition to be the easiest bank to deal with for our customers.” The bank increased its total operating costs by 19% to £260 million in 2018 to support its larger and more independent business structure. n For more on life outside the new ring fence, see page 38.

ersey’s funds industry continued to see a rise in the number of alternative fund managers choosing to market their funds through national private placement regimes (NPPR) in the second half of 2018, according to the Jersey Financial Services Commission. The number of Jersey-registered managers opting to market into the EU through NPPR rose 4% between July and December 2018, and by 13% compared with December 2017, to stand at 168. Meanwhile, the total number of Jersey alternative funds being marketed into the EU through NPPR also increased to 314 – a 3% increase since June 2018 and an 8% rise year-on-year. n

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Unlucky investors: what happens if you invest right before a market crash? Michael Bull, Investment Director in Quilter Cheviot’s Jersey office, offers reassurance to today’s investors by drawing on lessons learned from the often unpredictable markets of the past

THE END OF 2018 was a difficult time

for many investors, with some of the poorest short-term performance since 2015. As investors grew nervous over a combination of slowing growth, higher interest rates and increasing trade tensions, commentators warned about the dangers of a forthcoming recession. Many of our clients were understandably concerned, and contacted us to find out what was going on and whether they should adopt a more defensive investment stance. As it happens, we did not believe that the end of 2018 marked the end of the current good run in markets. While we were happy to reassure people, this option won’t always be open to us. We will have to face a market downturn at some point – that’s a natural part of investing. So how do we reassure clients – even if they are worried about investing right before a market crash?

INVESTING WITHOUT THE LUCK There are a number of ways to help answer this question. You can talk about the importance of having a long-term financial plan, reiterate the reasons for what we’re investing in, or explain the flexibility we have to help protect portfolios during a downturn in markets. The most powerful argument I can muster, however, is that the longer you invest for, the less relevant your entry point is. Seen from this perspective, it often makes sense to invest when you have a proper financial plan in place, rather than risk trying to time the market.

22 march/april 2019

INVESTING BEFORE THE CRASH To help show this, I looked at the last three bear markets in UK equities, examining what would have happened had you invested at the market high before the downturn. In our fictional example, we invest three lots of £100 in July 1998, January 2001 and May 2008. This is the only time we invest – right before the downturn. Our sole concession to reason

it often makes sense to invest when you have a proper financial plan in place, rather than risk trying to time the market

is to reinvest the dividends we receive; otherwise we are just investing three lump sums of £100. The last three bear markets – those of the Asian financial crisis, the bursting of the dotcom bubble and the global financial crisis – saw declines of approximately 25%, 30% and 40% for UK equities. Any one of these would generate a fair amount of soul searching on any investor’s part – professional or otherwise. It’s worth bearing in mind that investing only at market highs is the exact opposite of what any investment manager, financial adviser or market pundit will tell you to do. In our example, we have the worst luck possible, and the investment strategy is one of the worst imaginable. Despite this, our investments perform well over 20 years. By the end of December 2018, our £300 investment has turned into £650.53, more than doubling in value. Depending on which £100 lump sum investment you look at, that’s an annual growth rate of between 4% and 5.5%, although this does take into account any associated costs of investing. At that rate of return, you would have beaten cash, inflation, and government bonds, even with the worst luck possible. It’s well worth repeating that we are intentionally picking the worst day to invest right before a crash. Your chance of picking the market high for UK equities in any one year is one in 212 – the number of working days in a year minus bank holidays. However, your odds of picking the

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worst day to invest two years running are about one in 50,000, with the chances of you doing that three times in a row vanishingly small. If you are unfortunate enough to invest on the worst day ever three times in a row, you should probably sell your story to the financial press while prophesising the next bad day for markets. You would likely make up for any shortfall in returns.

WHY DO I DO WELL EVEN IF I INVEST AT THE WRONG TIME? For many people, the result outlined above will seem counterintuitive. How can you still enjoy good returns if your starting point was so abysmal? The answer lies in the fact that equity markets generally return around 7% a year over the long term. If you invest before a downturn, you will inevitably see negative short-term returns, but these will gradually be erased by the continual 7% effect over the long term. The longer you invest for, the greater this effect will be.

WHAT ABOUT IN THE CASE OF A REALLY BAD BEAR MARKET? Of course, many will still worry about what happens if we see an exceptionally aggressive bear market. What happens if we see another period like that of the 1930s, where the Great Depression caused US equities to fall by 89%? The answer to this is complicated. First, and reassuringly or not, we have all already witnessed events which could have led to a second Great Depression – the financial

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crisis of 2008. It was precisely the lessons learnt from the 1930s that mean we are now in one of the longest bull markets in history, rather than talking about a second Great Depression. Second, our rule about investing for the long term still holds out. US equities delivered flat performance from 1929 to 1947, managing only to keep up with inflation, but the post-war period saw one of the greatest bull markets in history, with investors well rewarded for their patience. Between 1947 and 1965, US equities delivered an annualised return of 11% – more than half the rate we would typically expect equities to deliver.

KEEPING AN EYE ON LONG-TERM OPPORTUNITY Hopefully, this will help to reassure anyone thinking about investing today. We cannot rule out the risk of a downturn, but we can say that a long-term investor will likely do well from the current point, provided they stay invested. There are ways that you can mitigate the impact of a recession, but when looking at my own portfolio, I find the idea of a long-term time horizon to be most comforting. After all, it’s something I can control. For those who believe that markets are expensive currently, and are waiting to invest at the bottom, ask yourself whether you will really be prepared to buy back in when the news is more negative. You could have looked at equities in the depths of the financial crisis, seen that they were objectively cheap and bought in. But you

would have had to contend with worries about the collapse of the global financial system, a return to tariffs and protectionism and, had you been particularly prescient, concerns about the disintegration of the euro. Good luck investing at the bottom with that on your mind! Buying at the bottom is never easy, and there’s always a reason to hang on for that last leg down. As a species, we are inherently risk averse, feeling the pain of losses twice as much as the joy from gains. That probably served us well in the past, but investing requires a slightly different approach. Making sure that you are a long-term investor who’s able to ride out all the ups and downs of the market is the best approach to take, even if you do prove to be exceptionally unlucky. n

FIND OUT MORE

For further information, please visit www.quiltercheviot.com or contact: Tel: +44 1534 506 070 Fax: +44 1534 768 108 Email: michael.bull@quiltercheviot.com

march/april 2019 23

Interview

After overseeing a record year of listings growth, you’d think the CEO of The International Stock Exchange would take a breather. But Fiona Le Poidevin is having none of it. In a fast-changing and competitive landscape, she says complacency is off the agenda Words: Eila Madden Pictures: Stacey Upson

In a nutshell, what does TISE do? We’re a stock exchange. Essentially, we facilitate capital flows between investors and companies by providing a platform for investors to invest in various securities and for companies to get access to that capital. We have a number of products that are listed, some in the form of debt – for example, corporate bonds and highyield bonds – or in the form of equity, such as investment funds or trading companies. It’s very much a global business and institutionally focused, although we

24 march/april 2019

do have retail products as well. But the institutional focus really reflects the business in the Channel Islands across the financial services industry, which is similarly heavily institutional in focus. What would you say is TISE’s USP? There are a few things. We have a strong focus on client service and the expertise of our listing sponsors – the law firms, fund administrators, corporate service providers and so on who bring the issuers to market. I think we’re also very cost-effective compared with other exchanges. We’re a transparent, regulated marketplace that is located in Europe, but not within the European Union (EU), which gives us an ability to be more proportionate with our regulation and to tailor it better for particular types of business. Are you seeing any trends in the types of securities that are being listed on the exchange? We see a lot of debt and investment funds in a variety of different asset classes and different types of industries. However, our particular focus in the past couple of years has been high-yield bonds, where we’ve seen more than 170 securities listed during that time, and also real estate investment trusts (REITs) – we now have more than a quarter of the UK market for those vehicles. There have been a number of factors that have led to the growth in REITs. There’s just the general movement in interest rates and the demand for yield by investors. Then when we had the Brexit vote in 2016, the pound fell significantly, which led to international investors seeing UK real estate at what was effectively a 15% or 20% discount. Therefore, lots of international money was coming into the UK real estate class and REITs were being used to set those

vehicles up in order to invest. TISE has now been named the alternative to the London Stock Exchange (LSE) in terms of listing these types of vehicles. In 2018, we listed more REITs than the LSE, which was a fantastic achievement. TISE experienced record growth in listings during 2018. What’s behind this performance? We’ve been delighted with the growth and I think there’s been a huge amount of work from my team in terms of our focus on marketing, but there’s also been a focus on product development. Quite a significant amount of growth is probably down to taking market share from others. I don’t think we can break records every year, but we hope our success will continue at the exchange because it benefits the wider financial services industry in the Channel Islands, which is good for everybody. You currently have a presence in the three Crown Dependencies. Is expansion into other jurisdictions seen as a potential growth option? We do hope to expand further in the future and we’re always seeking out opportunities in that regard, but we already consider ourselves international in nature just based on the diversity of the geographical markets from which our listings are originating. I think we will see more expansion, but it’s a case of concentrating on the markets where the work’s coming from. On to Brexit. Everybody’s talking about a ‘no-deal’ scenario at the moment, but what impact would a no-deal Brexit have on TISE? I think that, typically, the Channel Islands follows the UK in terms of prosperity, so it’s in our interests in the Channel Islands to want the UK to come out well from

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What’s your background and how did you get to where you are now? I graduated from Durham University with a mathematics degree. Having been born and brought up in Guernsey, like many 18-year-olds from here, I wanted to escape to the big smoke post-university. I started my career with PwC in London, where I did both audit and corporate tax advisory, primarily in the financial services sector and then for FTSE 250 clients. I wasn’t ready to come back for quite a while and then decided to make the leap, joining PwC Guernsey for what was meant to be 18 months – and that was 15 years ago! When I came back, all the plans for tax reform were going on for the zero-10 regime. I was heavily involved in that. It’s quite a unique experience in the tax world to see a regime completely reformed so it was quite an interesting one for me. There were so many opportunities arising that I stayed. After PwC, I spent four years at KPMG before I saw an opportunity at Guernsey Finance. I was ready for a change, so I joined Guernsey Finance in 2011 and I was Chief Executive there from 2012 to the end of 2014. Then I joined The International Stock Exchange (TISE) – at the time, the Channel Islands Securities Exchange – in January 2015.

Interview

The

interview Fiona Le Poidevin www.blglobal.co.uk

march/april 2019 25

Interview

it’s important to be mindful of Brexit, but it’s also important not to neglect the wider global markets

You’ve also described Brexit as an opportunity for TISE. Tell us more about your thinking here. I mentioned our success in the REITs market, which has partly been boosted by the Brexit effect. I think the other area where Brexit essentially strengthens our argument is the need in the UK for capital to support small and medium-sized enterprises (SMEs), which are really the ‘engine’ of the UK economy. So in January, for example, we listed Likewise Group, which is a relatively small UK company. They’ve raised £7 million on the exchange to fund their general growth and future acquisitions. In the current environment, with Brexit, the UK needs such capital for growth, jobs and stability and, hopefully, we can contribute to that at TISE.

26 march/april 2019

Moving away from the UK, you’ve seen a substantial increase in turnover from overseas. Why is this? There’s been a wider industry focus across the Channel Islands on international markets over the past few years and that’s starting to reap rewards. So, for example, our sponsors are now marketing themselves and their businesses much more widely, which is then creating those wider opportunities for us too. TISE itself has really changed its own marketing focus over the past five years – we now promote much more on a global basis and we’ve started to see work coming in from those various jurisdictions. We also look at the Guernsey Finance and Jersey Finance strategies and the various jurisdictions in which they’re promoting the islands. Because if we can get a critical mass of businesses, all in the same jurisdiction, marketing services that we provide, we hope that leads to more work coming through the door. So, for example, we’ve been looking more at the US over the past couple of years, as well as South Africa, the Middle East and Asia. The US Securities and Exchange Commission (SEC) recently recognised TISE as a Designated Offshore Securities Market. What’s the significance of this? The SEC’s move recognises our equivalent regulatory standards. It makes some processes less onerous for those

people issuing securities that don’t need to be approved by the SEC. In other words, the SEC is relying on our regulatory standards, which should create a smoother process for clients who are listing their securities with us. From a reputational perspective, it’s an incredibly positive development for the Channel Islands and the exchange to be recognised in this way. You mentioned that your record growth in 2018 was partly down to bringing new products to market, one of which was TISE GREEN. How has the market responded to this? It’s early days still, but there’s been a huge amount of interest from issuers, investor groups and the industry in general in the Channel Islands. We already have a lot of investment funds that invest in environmentally positive assets so we have a base to work from in that regard. One of the things that’s important on green and sustainable finance is the ability to measure the positive effect that some of this financing will have. That’s partly the reason why we set up TISE GREEN – to provide some sort of consistent measurement of the environmental impact of green investments and give visibility to those securities that create that positive environmental impact so that investors are hopefully better informed and have more choice.

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this situation. But business is global in the Channel Islands and it’s not all about Brexit. That applies to the wider industry as well; not just the exchange. Increasingly at the exchange, we have very good relationships in the rest of the EU. We were recognised by BaFin, the German regulator, in 2017 for our regulatory standards, for example. So, I think that it’s important to be mindful of Brexit, but it’s also important not to neglect the wider global markets that are out there because that’s where increasingly we are seeing the bigger opportunities coming from.

Five reasons to do business in China. 1 2 3 4 5

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Together we thrive *Lines are open 9am to 5pm, Monday to Friday. Your call may be monitored and/or recorded for training and security purposes. Issued by HSBC Bank plc, Jersey Branch. HSBC Bank plc, registered in England and Wales number 14259. Registered office 8 Canada Square, London, E14 5HQ. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. HSBC Bank plc, Jersey Branch is regulated by the Jersey Financial Services Commission for Banking, General Insurance Mediation, Fund Services and Investment Business. HSBC Bank plc, Guernsey Branch is licensed by the Guernsey Financial Services Commission for Banking, Insurance and Investment Business. To help us to continually improve our service and in the interest of security, we may monitor and record your communications with us. ÂŠHSBC Bank plc 2019. All Rights Reserved. 190205/NN/068

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Interview

FACT FILE Name: Fiona Le Poidevin Age: 42 Position: Chief Executive, The International Stock Exchange Group Studied at: The Ladies College, Guernsey; The College of St Hild & St Bede, Durham University Graduated in: Mathematics Married to: Dave Jones, IT consultant Hobbies: Painting in acrylics, walking, attending local events such as the Sark Folk Festival Did you know: I played basketball for the university first team and captained my college Do you plan to launch anything else in the green segment? I see green and sustainable finance as a subset of the wider impact investment movement, so I can see the potential for us to either open the segment wider or potentially create another segment for other types of impact investment. We have social housing funds in the Channel Islands, including listed on TISE. We have a number of other social impact type initiatives that are invested in through the private equity industry here, for example. So there is that wider impact investment angle to consider, but I think that green and sustainable finance is a sensible place to start. Beyond impact investing, do you have any other product offerings in the pipeline? Well, partly in response to TISE GREEN, we recently updated the listing rules to better accommodate retail debt products. That will open up not just the green offering, but also a wider offering of other retail type products. TISE is also doing a lot of work on digital assets. We’ve already listed the world’s first regulated Bitcoin fund on an exchange worldwide. We have other similar queries in the pipeline. We’ve also become home to the first ever regulated exchange listing of notes digitised on a blockchain. Now, we’re looking at things such as initial coin offerings and security token offerings. The other area is not necessarily new products, but we are hoping to see more Channel Islands companies listing. We saw PraxisIFM list back in 2017. They’ve raised £40 million and made five acquisitions with that funding, so they are really going from strength to strength. We would love to assist more success stories like that. We’ve had quite a few

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In a marketplace moving this quickly, we need to keep up with the pace we’ve set

enquiries during the past year, so I’m hoping to see further Channel Island companies listing this year. On the subject of digital assets, why do you think you’re able to attract ‘world firsts’ in areas like Bitcoin and blockchain? Guernsey and Jersey both have strong digital strategies and if the jurisdictions are open to this type of business, then we want to be as well. I’m regularly receiving enquiries as a result of the promotion and the open door that Guernsey and Jersey have. People are coming to us voluntarily with ideas. In response, we are very much trying to be an innovative exchange. We’re very open to ideas. We try to keep abreast of emerging trends and be nimble and adapt, introducing new products in a relatively short space of time. The relationship we have in place with our stakeholders, such as our sponsors, means that they are willing to bring new ideas to us as well. That said, there are a huge number of risks in the crypto and digital asset space

that need to be taken seriously, but we want to look for the good business within that and the islands as a whole are very much the same. It’s about working with our regulators, working with industry and making sure we are educating ourselves and are technically competent to deal with what comes through the door. Looking ahead, what do you see as the main opportunities for TISE? There are a few areas. One is continuing to look for ways to boost liquidity. We’re looking at our systems, we’re engaging with investors, we’re looking at the ways in which trading is changing. We also need to appeal to the next generation of investors and watch very closely where the capital markets are going, and therefore issues such as digital assets are key. Finally, what’s going to keep you awake at night? We’re in a fast-changing, competitive landscape. We’re seeing new marketplaces pop up that are not your traditional exchange – things like crowdfunding. We’re seeing quite a lot of disintermediation, which is laudable but also comes with certain risk. I think, also, with the perceived cost of listing and how difficult it can be, there’s been a trend around companies wanting to stay private because they have all of these alternatives available to them. In a marketplace that’s moving this quickly, we need to keep up with the pace that we’ve already set, and I think that applies across the Channel Islands. We can’t be complacent. We’ve got to be hitting these markets and showing what we can do as jurisdictions. n EILA MADDEN is Editor-in-Chief of Businesslife magazine

march/april 2019 29

Know your customer

aml? without the paperwork? really? A less painful and more efficient process for client checks is on the horizon – but Getting there will be difficult Words: Paul Bryant

30 march/april 2019

WE’VE ALL BEEN through the pain of

collating documents to open a bank account – copies of passports, utility bills, payslips and so on. So, imagine how much more complicated the process will be for offshore clients of Channel Islands private banks or investment funds. These are often high or ultra-high-net-worth individuals, or institutions, with complicated affairs structured through trusts or corporations. And imagine their frustration when they have to go through the same process all over again when they make their next investment, with a different bank or fund. It’s tempting to vent at the financial services providers, but they are only fulfilling their legal obligations. In industry jargon, they are conducting anti-moneylaundering or AML checks. (‘KYC’, or know-your-customer, and ‘onboarding’ are

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Know your customer

WORTH THE EFFORT It’s a problem that financial executives have every reason to tackle head-on, however. The reputation risks of an AML slip-up are huge. Vermeulen says no one on the islands wants to be that person or organisation that inadvertently facilitates a criminal transaction. And manual checks lead to more errors. There are also opportunities to cut costs. Dr Andy Sloan, Deputy Chief Executive, Strategy, at Guernsey Finance, says his research reveals that financial institutions can often reduce their AML costs by as much as 20% if they move to more digital processes. This can be significant considering the number of people who are employed in due diligence, risk and compliance functions.

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A slick AML process can help to win and keep clients. Stefano Finetti, a Senior Private Banker at ABN Amro in Guernsey, says: “There is a genuine risk of frustrated clients saying ‘this process is just too difficult’ and opting to go with another bank when trying to open an account. “People are also creatures of habit. Once they’ve had a good experience with a bank, they’ll use them again for any future accounts they require. So AML is not just a back-office function, it’s absolutely an area of competition between banks.”

PATCHY PROGRESS One of the more commonly touted visions for the future is the creation of a central ‘utility’ – a single data repository – where governments and financial institutions can pool and access customer data. If a customer gets cleared by one bank and then wants to open an account with another, the second bank can simply access that same information. Variants of the utility idea already operate in some markets, such as the UAE, where the backbone of that system is a compulsory ‘smart’ ID card. A customer wanting to open a bank account in a branch places their ID card into a reader, which feeds the bank’s systems with their personal data. Identity verification is then done with a fingerprint reader. This process is far quicker than providing paper copies of passports and utility bills, and more accurate than having a bank employee verify that the person in front of them matches an (often outdated) passport photograph. The utility solution can appear elegant at first glance, but it’s no panacea. It can work well where a local resident is opening an account with a local bank. However, its application is probably limited for the highly international Channel Islands

The million-dollar question is how we get from where we are today, where processes are still very manual, to a KYC utopia. It’s a long way away

market. And because many financial institutions see AML as an area of competition, they are unlikely to be inclined to share client information with a central database, accessible by competitors. Further problems with the utility concept arise from how responsibilities and liabilities are assigned when it comes to the accuracy of client data. For example, if bank A mistakenly clears a client they shouldn’t have, and then bank B uses that (already verified) KYC file to clear the same client, which bank takes responsibility? That’s a tricky issue for financial institutions and regulators to grapple with. However, variants of the utility theme are gaining traction. Guernsey-based platform The ID Register provides private equity funds and their investors with a ‘centralised’ onboarding solution. It has created a database of investor records – mostly institutional investors such as pension

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also common terms, but are really subsets of AML, referring to specific processes when taking on a new client.) The good news is that financial regulators and financial services providers all over the world, including in the Channel Islands, are making an enormous effort to improve the situation. Nick Vermeulen, a Partner in the Innovation and Technology practice at PwC in Guernsey, says: “Hypothetically, where this should end up is that, with one click, I’m able to share my (previously used) electronic KYC file with the next financial institution that I do business with.” The bad news is that in practice, what Vermeulen describes is incredibly difficult to achieve. “The million-dollar question,” he continues, “is how we get from where we are today, where processes are still very manual, to that KYC utopia. It’s a long way away.”

march/april 2019 31

BUSINESS LIFE

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Know your customer funds, family offices, trusts and sovereign wealth funds – which allow different funds to tap into the same records of an investor. Director Tim Andrews draws a parallel with an invitation to connect on LinkedIn. A fund can invite a potential investor to complete the KYC process with The ID Register. This information can then be accessed by another fund (with the permission of the investor), if they make an investment in that second fund. Likewise, an investor who has used the service before can ask a fund to use the already collated KYC information on The ID Register, rather than submit it all again. But extrapolating this model to markets with much larger client bases, such as private or retail banking, would be difficult. The ID Register operates in a niche market. Andrews reckons his 22,000 investor records cover a third of the potential investor base for Channel Islands private equity funds, so it already has the scale to make it worthwhile for the industry to use. He says building a large enough base of client data is a big problem for many of the fintech firms targeting the AML market. Many of them have impressive technical onboarding tools and elegant platforms, but struggle to get sufficient data and the permission to make it available to multiple financial institutions. Many financial institutions have adopted a go-it-alone approach and focus on trying to make their own processes as customerfriendly as possible – often using the latest technologies (see box). ABN Amro’s Finetti says his organisation has invested a lot in its AML processes, but he doesn’t see much potential for co-operation between banks.

WATCH THIS SPACE It’s too early to predict the endgame for AML in the Channel Islands. Sloan, of Guernsey Finance, thinks it’s quite possible for a central utility to emerge and play a big role in local AML checks – when both client and financial institution are based on the islands. But when it comes to more complicated international business with clients from all over the world – which is the bulk of Channel Islands financial services – he doesn’t see the utility as a solution. Instead, he stresses that co-ordination between public and private sectors will be required to encourage the adoption of new technologies and a private sector solution, but with a careful eye on protecting the rigour of AML processes and the reputation of the islands. He is optimistic that the working groups that have been set up will steer this co-ordination – such as the ‘fintech

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working group’ established by Guernsey Finance, involving representatives of industry, government and the Guernsey Financial Services Commission (GFSC). Sloan says: “We now have many innovative technology companies in this space, which shows we are at the technological forefront. And Channel Islands regulators have a ‘permissive’ approach to the introduction of new technologies for AML. It’s absolutely frontof-mind for them.” The GFSC reinforced it’s commitment to this at a Guernsey Finance event in London in January, when Emma Bailey, Director of Authorisations and Innovation, said: “The GFSC has always been supportive of the safe, secure exploitation of technology. We are happy to work with all stakeholders to look to develop an approach that creates

greater certainty for providers deploying electronic AML. The introduction of a revised AML handbook provides a welcome opportunity for us to make clear our commitment to ex ante discussions over the deployment of technology in the AML process.” Andrews says it’s much more of a human than technological challenge. “We need regulators to continue to show flexibility in their attitudes towards new solutions. To make big leaps forward, private companies – financial and tech – need to overcome a fear of being penalised if they get something wrong with a new technology. We have to overcome the fear of ‘I don’t want to be first’.” n PAUL BRYANT is a freelance writer

Technologies to look out for 1. Mobile scanning How it works: Customer sends photograph of passport and ‘selfie’ to bank. Bank systems read and capture data from photograph of passport using optical character recognition (OCR). Bank systems scan selfie (which includes a short video clip of person blinking to verify ‘life’) and uses facial recognition software to verify match with passport. Benefits: Removes need for face-to-face KYC. Much faster. Reduces errors from manual input and manual facial recognition checks. Barriers to adoption: Few, other than banks, investing in systems. 2. Algorithms and artificial intelligence How it works: Commonly used to reduce ‘false positives’, which is where the client is flagged as a potential criminal, most commonly because they share a name, triggering a second round of more detailed checks (typically a very manual and expensive exercise). Algorithms are used to clear false positives through explicit rules – for instance, same name but birth dates far enough apart to verify no match – and through ‘learning’ the factors that humans use to clear false positives. Benefits: Cost reductions for banks. Removes delays to KYC approvals when false positive is triggered. Barriers to adoption: Few, other than banks, investing in systems.

3. BlockchaiN How it works: Essentially a database, not owned by any single party, where the client owns their KYC data and can grant access to financial institutions when necessary. Institutions can record and verify information in the blockchain, and other participants receive certification that data is legitimate and has not been tampered with. A single, immutable record of KYC data. Benefits: Potential to remove vast amounts of duplication, with subsequent speed and cost benefits. Barriers to adoption: Agreement needed from multiple institutions on questions to ask in KYC process. Parties using the blockchain need to trust each other’s verification processes. Both of these requirements have been difficult to achieve to date. Needs substantial regulatory reform.

march/april 2019 33

Tax

Shipshape New tax rules on substance should enhance the Channel Islandsâ&#x20AC;&#x2122; reputation as a well-regulated international finance centre â&#x20AC;&#x201C; and make the additional compliance burden worthwhile Words: Richard Willsher

34 march/april 2019

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EFFECTIVE IN GUERNSEY, Jersey and

the Isle of Man from 1 January this year, the new substance tax legislation was prompted by the European Union’s Code of Conduct Group (Business Taxation) (COCG). Its aim is to ensure that businesses that choose to incorporate in low- or no-tax jurisdictions should not be able to avoid being taxed in countries where they actually do their business. The corollary is that businesses that are tax domiciled in the islands should be able to demonstrate that they have real operations or ‘substance’ there. Joint guidance put out by the three Crown Dependencies on 21 December 2018 explains that the activities that fall within the scope of the new tax rules are ‘geographically mobile financial and other service activities, identified by the OECD’s Forum on Harmful Tax Practices’ (see box overleaf for more). If a business falls within scope, and is tax resident on one of the islands, it must be able to demonstrate that it has substance by being able to prove to the local tax authority that ‘it is being directed and managed in the island, conducting Core Income Generating Activities (CIGA) in the island, and having adequate people, premises and expenditure in the island’. The term ‘adequate’ will be determined by the nature and activities of businesses.

More guidance will emerge in due course, but, for the time being, a broad assumption can be made that, because the islands already have a rigorous regulatory regime in place for most of the categories of business that fall within scope, they are likely to be able to meet the substance requirements. John Riva, Senior Tax Partner at KPMG in Jersey, who was involved in drafting the legislation, is confident of this. He says: “This legislation, although some of it’s quite daunting when you first look at it, is actually quite good for the island. For the past 20-odd years, people like me have been screaming about trying to ensure that the profits you book in the island are justified. Now we have a specific legislation that says this is exactly what you have to do.”

REPORTING DEADLINE Although the legislation took effect from 1 January 2019, the first tax return to incorporate the new reporting will be submitted in respect of tax year 2019/20. A business with a 31 December year-end, for example, would report at some stage in 2020, following the end of their tax period on 31 December 2019. An important point to note, however, is that reporting will need to demonstrate substance compliance throughout the reporting period, not just at its end.

Riva points out: “This means it’s not a snapshot at any one point of time during the year as to whether you comply. You need to look at the whole business operation throughout the year and consider, on the balance of probabilities, whether that company complied with the law during that year.” In any case, as yet, the new tax forms are not available. They will be made available by the respective tax authorities in due course. The message is clear, however. Don’t wait to see the forms; businesses should start making sure that they are likely to be compliant straightaway. This note of caution is echoed by Guy Westmacott, a Partner in the Jersey office of law firm Bedell Cristin. “I think most regulated businesses on the islands are likely to be either compliant or largely compliant already. “That being said, it’s going to be necessary for all companies that do or may fall within the scope of these laws to carefully consider whether they need to tweak anything in terms of their current governance arrangements, and particularly outsourcing.” He continues: “So, people can’t be blasé about it, because there are details here that require some analysis to ensure that companies are compliant.” Moreover, there are penalties for non-

▼

Tax

reporting is not a snapshot at any one point of time during the year as to whether you comply. You need to look at the whole business operation throughout the year and consider whether that company complied with the law during that year

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march/april 2019 35

Tax

A first failure to comply will be subject to a fine of £10,000. A second breach will result in striking the company off the Companies Register

Who’s affected? Activities that fall within the scope of the new tax rules include: • Banking • Insurance • Shipping • Fund management (this does not include companies that are Collective Investment Vehicles) • Financing and leasing • Headquarters • Distribution and service centres • Holding company (a pure equity holding company) • Intellectual property (for which there are specific requirements in high-risk scenarios)

36 march/april 2019

compliance that could be quite draconian. A first failure to comply will be subject to a fine of £10,000. A second breach will result in striking the company off the Companies Register – a ‘two strikes and you’re out’ approach. Given the length of time businesses will have had to prepare, there would seem to be little excuse for falling foul of such sanctions. The best course of action is to look at the Key Aspects document on tax authorities’ websites for a useful grounding. This will be supplemented in due course with additional guidance. Businesses that fall outside of regulated sectors should pay particular attention; this includes intellectual property (IP) businesses. The substance legislation is particularly levelled at companies that may domicile their businesses in low-tax or no-tax jurisdictions, drawing income from licensing sales in other geographies. It may be difficult for them to substantiate that their CIGA are located on the islands, as Chris Hutley-Hurst, Senior Associate at Carey Olsen in Guernsey, explains. “This is because IP is so highly mobile and certain big-name tech companies have used somewhat aggressive offshore structures to minimise the tax they pay in relation to their IP,” he says. “The substance requirements for IP are quite high and there’s an expectation that we will lose some IP business, but it’s difficult to think where that business would then go.” It’s worth noting that some 90 jurisdictions have been the subject of scrutiny by the EU’s COCG. They will all need to comply, so in the end the playing field will be level, and highly mobile IP companies will have nowhere to go to gain tax advantages. While no business welcomes more

compliance, as with all forms of regulation and legislation, the new substance legislation in the islands is a fait accompli. So, what will be its effect? On balance, the result could be positive and supportive of businesses across the islands, according to the experts. “It could drive some poorer quality businesses away,” says Mark Savage, a Tax Director in the Guernsey practice of accounting and advisory firm BDO. “The substance requirement ensures value is being added, so what we should get is better quality business. I’d say the effect of this legislation is neutral, tending towards good.”

THE VERDICT Carey Olsen’s Hutley-Hurst agrees. “Ultimately, it’s positive, because I don’t think it’s going to drive business away from the island. I think it shows that the island already has a high level of substance because of our regulatory laws and our regulator. So, I don’t think people are overly concerned about the rules.” Bedell Cristin’s Westmacott concludes with another, perhaps more pragmatic, view. “I think the laws as currently drafted, on balance, are positive, primarily on the basis that they are necessary to keep us off the EU blacklist. “If they can achieve that, and contribute to the reputation of the Channel Islands as well-regulated international finance centres, then I think that’s a good result.” In the final analysis, many on the islands will agree that this is a worthwhile outcome from the additional tax compliance that the substance legislation will require. n RICHARD WILLSHER is a freelance finance writer

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Investment opportunities remain despite political and economic volatility UBS is the world’s largest global wealth manager and winner of multiple awards, including Global Best Overall Private Banking Services1. For 14 years, the annual UBS Forum has been held in the UK and Jersey, providing analysis and key insights to private investors. The recent 2019 forum saw speakers Dean Turner, Caroline Simmons and James Mulford, all from UBS, and Thomas Raines, from Chatham House, deliver a series of informative presentations where the subject of volatility was high on the agenda 2018 WAS THE ninth consecutive year of growth for the global economy. However, it is becoming clear that a turning point has potentially been reached, with growth slowing and the expectation that this deceleration will continue in 2019. Economist Dean Turner, from the UK Investment Office at UBS Wealth Management, believes that we are now in a mature phase of the economic growth cycle, but a recession in 2019 is extremely unlikely. And whilst the volatile political environment hasn’t previously had an impact on overall market conditions, there are signs that these have the potential to evolve into economic challenges, with examples such as the US/China trade dispute and the effects of the Italian government policies on bond markets. However, Dean is quick to highlight that not all political risk presents a downside. “Despite all of the volatility we have had in emerging markets, from an economic perspective, predicted growth expectations were largely met, in spite of the head winds of high US interest rates and a much stronger US dollar than expected,” Dean says. “In 2019, economic growth is set to slow across all of the major economic blocks compared with 2017/18, which saw the fastest rates of economic growth for

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the global economy since the start of the decade. Economic growth has provided a tail wind for the markets over the last couple of years and as it slows it may lead some investors to question if the end of the economic cycle is approaching.”

POLITICAL VOLATILITY There has been an obvious global trend towards populist governments being elected and there is every likelihood of populism and protectionism staying on the radar throughout 2019. Thomas Raines, Head of the Europe Programme at Chatham House, is keen to point out, though, that political volatility is not a new concept, but has trended upwards since the 1970s, along with the decline of party identification and voters being less loyal.

INVESTMENT OPPORTUNITIES REMAIN With such a potentially concerning political and economic environment, however, the message from UBS is still a positive one, as they continue to outperform peers and win awards. Caroline Simmons, Deputy Head of the UK Investment Office at UBS Wealth Management, is clear that whilst market volatility is unlikely to go away, it is too early to sell equities. This is because historically, they have performed well in the late cycle. However, the current political uncertainty does mean that investors may wish to diversify globally and be selective. James Mulford, Head of UBS Global Mandates & Investment Content (UK & Jersey), suggests that investors could adopt the Liquidity, Longevity, Legacy (3Ls) approach to wealth management to help prepare for volatility. Michael Clarke, Head of Private Clients at UBS Wealth Management in Jersey, explains that his team is in an optimal

Pictured (l-r): Dean Turner, Caroline Simmons, Michael Clarke, James Mulford, Thomas Raines position to support wealth management. “Our local expertise, combined with the global strength of UBS, provides clients with an unrivalled wealth management experience,” he says. “We take time to understand what is really important to our clients and provide intelligent solutions, and this level of experience and care puts us in an ideal position to provide invaluable support during these more volatile times. “The knowledge of our client advisors, matched with a well thought out wealth management plan, can make a real difference.” n 1

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FIND OUT MORE

For more about UBS Jersey’s services, contact Michael Clarke, Head of Private Clients, UBS AG, Jersey Branch, 1 IFC, St Helier, Jersey JE2 3BX 01534 701148, michael.clarke@ubs.com

© UBS AG, Jersey Branch is authorised and regulated by the Jersey Financial Services Commission for the conduct of banking, funds and investment business. UBS AG, Jersey Branch is a branch of UBS AG (a public company limited by shares, incorporated in Switzerland whose registered offices are at Aeschenvorstadt 1, CH-4051, Basel and Bahnhofstrasse 45, CH-8001 Zurich) with its principal place of business at 1 IFC, St Helier, Jersey JE2 3BX. Terms and Conditions are available upon request. © UBS 2019. All rights reserved.

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march/april 2019 37

Banking reforms

Ringing the changes

after being excluded from a new protective ring fence around retail banking activities, Channel Islands branches and subsidiaries eye up the resulting opportunities

38 march/april 2019

Words: Phil Thornton

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Banking reforms

ISLAND EXCEPTION The ICB had not considered the case of the Channel Islands branches or subsidiaries of the big five. As Sir John told Businesslife: “The ICB didn’t examine the issues affecting the Crown Dependencies. That came up later in the [government] consultation.” Originally, there was a prospect that Channel Islands branches might be permitted inside the ring fence, but eventual government policy only allowed business activities inside the European Economic Area to form part of it. Those banks affected by the new rules

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and which had Channel Islands operations had to ensure that these operations were no longer held within the UK unit that would be inside the ring fence. All five affected clearing banks had a unit in Jersey, while in Guernsey the banks affected were the big five minus Santander. Wendy Benjamin, Managing Partner of the Jersey and Guernsey offices of law firm Appleby, which also has operations in the Isle of Man, says one of the factors that contributed to the Crown Dependencies being outside the ring fence was the difference in the way the depositor compensation schemes operated in the UK and on the islands. “It would have been quite complicated to make them entirely compatible with UK ring-fencing and recovery and resolution legislation,” she explains. “Anecdotally, we heard they were unable to find a satisfactory position ahead of the UK legislation.” Moving branches and subsidiaries

The biggest change for the industry was rearranging its operations so it could position customers on the right side of the ring fence

outside the ring fence have been large transactions. “We have moved about £50bn worth of deposits from one part of a bank to another part in the past six years,” Benjamin says.

LEGAL PROCESS The legal process that moves the deposittaking business from one part of a bank to another must be approved in court, which requires the bank to carry out an impact analysis and set out how any negative effects of this change will be mitigated. Benjamin says this included her banking clients having conversations with their customers who were worried or needed more information about the effects of the court-sanctioned scheme on their day-today banking requirements. These worries included knowing that their bank accounts would continue to operate as before, such as with the same sort code and account number, whether they would suffer any negative financial impacts, and whether or not the services they enjoyed would remain in place after a restructure. All clients needed to receive proper notice of any likely changes arising as a result of a restructure. “That needs a lot of careful handling to make sure [the banks] are treating customers and other stakeholders such as employees fairly and that any impacts are mitigated,” Benjamin explains. In the case of RBS, its UK and Irish personal and commercial banking activity was placed inside the ring fence, while its investment banking and RBS International (RBSI) business in the Channel Islands were positioned outside of the ring fence. Peter Softley, RBSI’s Director, Strategic Regulatory and Business Planning, and the bank’s ring-fencing lead, says this type of transfer involved major restructuring across all the large UK banks with operations in the Crown Dependencies. “The biggest change for the industry was rearranging

march/april 2019 39

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A DECADE AFTER the rescue of a number of UK banks, the collapse of Lehman Brothers and the worst recession for generations, the financial sector is entering a new era of regulation. Since 1 January, the UK’s five largest banks have had to put their high-street operations behind a ‘ring fence’ to keep them separate from riskier capital markets activities. The change was central to a reform programme based on a report into the industry by the Independent Commission on Banking (ICB), chaired by Professor Sir John Vickers. Having used £500 million of taxpayers’ money to stabilise the system, the government was determined to end the problem of banks being ‘too big to fail’ by isolating and protecting services where continuous provision, such as high-street banking and cash machines, was critical. The UK parliament legislated to create a ring fence, with each bank keeping retail operations separate from investment banking with their own boards, balance sheet and regulatory obligations. Ringfencing applied to banks with more than £25bn of retail deposits, so it embraced Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland (RBS, including NatWest) and Santander.

Banking reforms

its programme of operations so that it could position customers on the right side of the ring fence.” For RBSI, this meant migrating customers from other parts of RBS into new branches of RBSI, which is headquartered in Jersey. This migration mainly involved corporate customers, especially fund sector clients, who previously had accounts with RBS in London and Luxembourg. (The bank is a major provider of services to the funds industry.) This often involved giving them new sort codes and account numbers, as well as undertaking other operational changes, such as building payment redirection capability to support the automatic routing of payments to customers’ new accounts. It also inherited two depository businesses in Luxembourg and the UK that are focused on the funds sector. Softley says while the cost was “pretty significant”, the bank was determined to “make a virtue out of necessity”. By pooling the majority of its funds activity in one place, it would improve the customer experience compared with the previous model that served customers across multiple cash management and banking platforms. “We now offer a more consistent level of experience and customers are pleased they now have a single platform, whether they’re based in the Channel Islands, Luxembourg or the UK,” he says. “We have tried very hard to minimise the disruption and look at opportunities to improve the overall offering to customers.”

BALANCE SHEET CHANGES Softley says that as part of the restructuring, RBSI has had to change how it manages its balance sheet. Previously, surplus deposits were lent on to other RBS entities. Now RBSI manages its own liquidity portfolio and has invested in high-quality government bonds, it places money with the European Central Bank and Bank of England, and has also increased its lending to the funds sector – an important component of its Channel Islands operations since they were established in 1996. “We recognise the growth potential in

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rather than just taking deposits and upstreaming them to parents in the UK, banks are now looking for more commercial opportunities outside the islands

the funds sector, so we are prepared to invest in the customer proposition as well as undertaking further lending,” he says. “We will continue to work closely with fund customers to understand not only their current needs, but also what they might need over the next five to 10 years.” There is little sign that clients have been deterred from putting money into the Channel Islands because of concerns that their deposits could be bailed-in as part of a rescue of a parent bank. Figures from the Jersey Financial Services Commission (JFSC) show total deposits rose from £107bn in June 2016 to £121bn exactly two years later. The net asset value of regulated funds under administration grew by 14% on the year to stand at £301.7bn at 30 September 2018 – a record high, according to the JFSC. Benjamin says: “The Crown Dependencies are seen very much as safe havens during turbulent times and are still big deposit takers.” Geoff Cook, the former Chief Executive of Jersey Finance, points out that Jersey’s government tightened financial regulation,

introducing a recovery and resolution regime. “We didn’t have any failing banks as ours were capitalised more strongly, but, in line with the G20 and central banks’ coordinated approach to the crisis, we adopted this measure, improving protection for savers under the Depositors Compensation Scheme,” he says. Over the past 12 years, the number of licensed banks across the Channel Islands has dropped from 48 to 26. However, Benjamin puts that down to consolidation in the wake of the global financial crisis rather than as a result of being excluded from ring-fencing and therefore still being vulnerable to failure. Cook says the decision to keep the Channel Islands outside the ring fence raised questions about the future potential role of the local banks. The key challenge was how the banks would use the deposit finance now that it was not transferred to the parent banks in the UK – or ‘upstreamed’, in the technical jargon. Benjamin says: “You have fewer, but bigger, banks expanding the range of services they offer, so rather than just taking deposits and upstreaming them to parents in the UK, they are now looking for more commercial opportunities outside the islands and developing new streams of financing. “During this period of transition, there are some really positive opportunities for banks and we will see more autonomy in the islands as they develop new products.” One of those opportunities is to provide finance to commercial and international banks outside the ring fence that are looking for less volatile finance away from wholesale markets and short-term funding.

BRIGHT FUTURE When the ring-fencing legislation was originally released, there were fears that it would bring negative changes and potentially significant job losses. Softley says that now the banks have dealt with the issues of not being included in the ring fence, the future is bright as banks focus on using the money that’s no longer being sent back to parent banks in the UK to boost business in the Channel Islands funds sector. Looking ahead, it means that, with most of the regulatory changes complete, banks are better placed to take on the next wave of challenges, such as the impact of technology and artificial intelligence. Softley adds: “From a Channel Islands and RBSI perspective, we’ve tried to embrace the change and to look at how we can do more.” n PHIL THORNTON is a freelance writer

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Corporate reporting

Today’s investors are looking for more than a healthy bottom line, which means companies need to give non-financial reporting some serious attention

THERE WAS A time when investors would look no Words: David Burrows

further than the bottom line on the annual report. A healthy balance sheet, decent cash flow and a strong order book – check. But in recent years, investors around the world have come to expect broader, more useful reporting of material non-financial performance information. They want a clearer picture of the type of business they might potentially invest in. What has driven this change? High-profile corporate collapses such as Arthur Andersen and Enron in the early noughties scotched the myth that multinational Wall Street darlings were too big to fail. Then there was the financial crisis of 2007/8, when Lehman Brothers spectacularly fell from grace and a host of international banks fought for survival in the aftermath of the subprime market fiasco.

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Fiona Le Poidevin, CEO of The International Stock Exchange Group (TISEG), says the call for transparency has accelerated as confidence in corporate reporting has diminished. “I think investors over the past decade have increasingly demanded more detailed reporting from companies – certainly post financial crisis. Companies are now talking about corporate responsibility and are being mindful of all their stakeholders – not just their shareholders, but their customers and the public at large.” Lack of transparency in reporting has understandably made investors wary as they’ve seen share prices fall and brand reputations tarnished as a result of flawed practices and poor communication. High-profile non-financial news events, such as the Volkswagen emissions scandal and BP’s Deepwater Horizon oil spill, emphasise how swiftly financially robust and highly respected

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Coming clean

Corporate reporting

peer pressure among companies to feature in indices such as the JPX Nikkei 400 is really helping to focus the mind

companies can find themselves embroiled in a major damage limitation exercise. In a digital world, news and opinion travels fast. Rolling TV news channels, online news and social media ensure the public are not only kept better informed, but the masses can vent their spleen on social media and message boards. Patrick Thomas, Investment Manager at Canaccord Genuity Wealth Management, believes this level of engagement means companies are increasingly aware that non-financial information does matter. “It doesn’t take much these days to move a share price negatively and, increasingly, non-financial information is having an impact. Facebook is a prime example of non-earnings-related views really affecting the share price.”

FACEBOOK SCANDAL In July 2018, the social network suffered the biggest ever one-day drop in a company’s market value – 19% – after revealing to investors that its growth had slowed in the wake of the Cambridge Analytica scandal, which involved the breach of 87 million Facebook user profiles. Thomas adds: “In an age of big data and 24/7 news, there will continue to be an increased focus on non-financial information. In addition, I think that more and more institutional investment will be aligned to an environmental social and governance (ESG) benchmark.” Indeed, specific indices such as the JPX Nikkei 400 (composed of companies that meet specific investment standards, such as efficient use of capital and investorfocused management perspectives), and the MSCI ESG indices (which provide institutional investors with transparency into ESG sustainability) have had

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an impact. As Thomas explains, there is peer pressure among companies to feature in these indices and this is really helping to focus the mind. One of the advantages of technology is that armchair investors can conduct their own research into companies easily and cost-effectively. They’re able to make their own judgements – both financial and ethical – on where they place their money. Lee Morris, an Investment Director at Quilter Cheviot, believes an increased focus on ESG is being driven by investors that are asking more questions about companies’ practices. He points out that corporates are increasingly being taken to task on non-financial issues such as board composition and how equitably they run their business. Are pay rises awarded to the executive team in line with those given to all employees? How understandable are the targets behind long-term incentive plans? In the past, companies might have been more inclined to just pay lip service to ESG, but that’s changing. A new generation of millennial investors are increasingly focused on non-financial factors rather than the balance sheet alone. Rather than annual reports, companies are now more likely to produce regular and consistent updates, with compliance departments and internal/external audits ensuring all meaningful data is clear and available for scrutiny on an ongoing basis. Critical mass is important here. As soon as more companies provide transparent ESG information than don’t, the onus will be on businesses to follow this best practice in reporting or they will miss out on crucial capital flows. A company’s ESG credentials often help highlight enlightened and innovative operations. Even companies in sectors that may be screened out from certain ethical

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Corporate reporting

funds (or individual share portfolios) can enhance their reputation and win over new investors. As Morris explains, taking ESG factors into consideration is different to employing an ethical strategy, which tends to focus on excluding certain sectors or activities. “As an example, looking at a tobacco producer, one considers a number of factors: environmental – in this case, water usage might be an important metric; social – how is the company adapting in a world that’s turning away from burning tobacco; and governance – the usual considerations of remuneration, board composition and so on.” If investors don’t rigidly rule out a sector – for instance, alcohol or cosmetics – but retain some reservations on ethical grounds, they might be more favourably disposed to a company that’s operating more responsibly and sustainably than one of its rival brands. It’s an investment approach based on the ‘best of breed’ philosophy. An ongoing problem, though, is being clear that a company is as principled and as focused on sustainability as it claims. As Le Poidevin explains: “Companies are increasingly focusing on ESG. However, they are not always living by the ESG principles outlined in their corporate literature.” There are different levels of disclosure – some make worthy but largely vague references to ESG in their annual report, while others are prepared to go into greater detail on their specific ESG credentials. As a result, it is often difficult to compare like with like.

A GLOBAL STANDARD? While there may be more incentive for corporates to improve transparency and depth in non-financial reporting, there’s still no mandatory global standard to which companies must adhere. Would it be feasible to have a global standard along similar lines to the International Financial Reporting Standard (IFRS)? Thomas likes the idea in principle, but thinks it unlikely. “A globally recognised standard would be good, but I would be surprised to see large corporates lobbying for this. Also, there are different standards between emerging and developed markets. “I wouldn’t want investors to shun emerging market companies on the grounds that they are not savvy enough yet on non-financial reporting.” While a mandatory standard may be a bridge too far – in the medium term, at least – this doesn’t mean an array of sustainability and ethical benchmarks or accreditation can’t have the desired effect of inducing corporates to provide a clearer picture of how they operate and their inherent values. Organisations continue to introduce ESG-focused verification features. Le Poidevin name-checks the recently launched green market segment, TISE GREEN, which provides greater visibility on investments that make a positive environmental impact. To qualify for the segment, the investments must be verified by a third party as meeting a global standard in green finance. As such, it provides a platform for issuers to highlight certified green investments – whether bonds, funds or trading companies. It is reasonable to suggest that ESG assessment will

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find itself progressively integral to the investment decisionmaking process. Investor interest in factors such as supply chain, human rights, fair trade, recruitment practices and climate change are not transitory. Technology will increasingly be an enabler, too, in terms of trusted data – for instance, blockchain offers tamper-proof databases for any kind of information shared by a community. In the past, for example, consumers would have to take data relating to food production and distribution at face value. Now, via blockchain, there’s an opportunity to track all information accurately, from farm to fork. This level of transparency represents progress. Investors now have access to trusted information that would previously have been denied to them. Because they are better informed on all aspects of a company’s business, they are better placed to judge all risks when making their investment decision. As Thomas stresses, investors are also less likely to follow the ‘don’t exclude anything’ mantra of previous years, which meant largely unquestioned exposure to FTSE large cap stocks. “People increasingly understand that many world problems will be solved by corporates rather than governments alone,” he says. Thomas suggests that if companies can help investors to understand the contribution they are making to tackling these problems through better nonfinancial reporting, they can help bring investment to life and engage with people. n DAVID BURROWS is a freelance finance writer

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Advertising feature in association with Locate Jersey

Profile: Daniel and Susana Rowles, Target Internet

Since deciding to relocate from the UK last year, Daniel Rowles, Chief Executive, and Susana Rowles, Commercial Director, of Target Internet have discovered that throwing themselves into community life has paid real dividends as they look to grow their digital marketing skills business from Jersey Give us an insight into what Target Internet does? Daniel Rowles (DR): We work with organisations all over the world to help them upskill their teams’ digital marketing capabilities, covering anything from data analytics, content marketing and search marketing to developing a digital strategy, mobile marketing and social media. We do that through face-to-face sessions and by delivering online courses through our e-learning portal, whilst we’re also an official centre for the Chartered Institute of Marketing (CIM), which allows us to provide CIM qualifications and

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certification. We also produce the weekly Digital Marketing Podcast, one of the most listened-to marketing podcasts globally. Susana Rowles (SR): We also offer a skills benchmark for firms, so we can identify where firms are strong in their skill set and where there is scope for improvement. That way we can provide a tailored approach to help give them the support where they need it most. Over the years, we’ve developed around 150 different specialist courses and we’re continuing to build and evolve that library, so we can be pretty targeted in how we can help support any organisation.

What made you consider Jersey as a place to move to? DR: We were previously based in Brighton and had been thinking about making the move to somewhere else. We’re a distributed business, with colleagues working remotely elsewhere in the UK and a development team in India, so it was a relatively straightforward move in terms of footprint. I’d visited Jersey a number of times in the past and had always been keen on it as a place to live. Once I got talking to some of the people here about the business landscape and Jersey’s ambitions in the digital space, it was a no brainer really.

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Advertising feature in association with Locate Jersey

We had looked at other options, but we kept on coming back to the reality that in Jersey there were really no barriers. It felt like there was a real affinity between what we do as a business and what Jersey was doing as a jurisdiction – plus it’s familiar in terms of language, has a sophisticated and cosmopolitan economy and offers really easy access to the UK. Overall, it felt like a natural move for us. Was the relocation process straightforward? SR: We moved over in March 2018, and it’s actually hard to think how the process could have been any easier. From the outset, through Locate Jersey and Digital Jersey, we’ve been introduced to people who could help us sort things out, from a business perspective, with things like licensing and establishing a company, to personal and family things, such as sorting out accommodation and registering for schools for our children. The whole process has been remarkably smooth, and the after-care we’ve received since being here has been hugely helpful too. DR: One of the things we’ve been really impressed with is the ease of access to expertise. Whether we’ve needed to speak to accountants, lawyers or government officials, people have been really amenable and available for us to speak to. You simply don’t get that everywhere. Accessibility has been an important factor too. We work with organisations in London, across the UK and overseas. I’m also an associate professor at Imperial College, so being able to get to and from the island has always been important. The connections Jersey has to London in particular is a real advantage. How have you found settling in to your new home? SR: When we moved, we were very aware of the fact that we would need to build up our network in Jersey quite quickly, and pretty much from scratch. So we’ve deliberately got ourselves involved in the local community as much as possible, both from a business and a personal perspective. I’ve been lucky in that I’ve had a number of opportunities come my way, including supporting the Georgian Association and the 23rd Jersey Scout Association. These things have all been great to get involved in anyway, but they’ve also been incredibly helpful for us in terms of getting to know people and the island better. We’re supporting JCG’s Leadership and Entrepreneurship Programme (LEAP) too, which is a hugely impressive initiative, and we’ve reached out to local firms and individuals to create the Jersey Marketing and Communications Group. Through

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this, we hold regular events to bring the local marketing and comms communities together. We’ve been really impressed with the response we’ve had to that. DR: We’ve also done a lot with Digital Jersey, to help deliver specialist digital marketing courses to local people. We’re also involved in the Digital Jersey Academy, to help support the drive to digitally upskill local people. All these things have been fantastic for us – there’s a clear appetite to network here and that has meant that making connections has been really easy. DR: From a family perspective, it’s been refreshingly easy to move here too. Our children have easily settled into their schools, and they’ve got themselves involved in local clubs and sports. It was always important for us that this move was a move that would suit us as a family as well as a business, and Jersey certainly ticks that box. The opportunities for families here, the lifestyle and work/life balance, and the safe and secure environment it offers, is an excellent mix. How do you see your business evolving? SR: We very much see Jersey as providing us with a strong platform to continue to grow our business internationally. It’s a real privilege to be able to work from here in this fantastic environment and at the same time work with global brands around the world. We also see strong potential to support the needs of a growing number of businesses in the island too.

It was always important for us that this move would suit us as a family as well as a business, and Jersey certainly ticks that box

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This advertising feature was produced in partnership with Locate Jersey. Visit www.locatejersey.com

DR: At the same time, I’m really excited about being involved in Jersey’s digital project and playing a part in supporting the digital skills drive locally. It wasn’t necessarily always our plan to get involved in the local community in all these ways, but in less than a year of being here, doing so has given us so much opportunity – and that’s symptomatic of the positive attitude here. It’s clear that local businesses and the government believe in the importance of digital skills, and that gives us real confidence in our future and Jersey’s future. n

march/april 2019 45

Divorce law

Avoiding financial The government of Jersey is consulting on changes to its 70-year-old divorce law. Experts are divided on whether the proposals will ease the financial worries of couples that are breaking up

Words: David Craik

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CHRISTMAS MAY BE a distant and happy memory for most of us, but for some, it marks the start of a long and unhappy road to divorce. This year, ‘Divorce Day’ took place on 7 January as couples, stretched to festive breaking point, began to seek a parting of the ways. According to divorce support service Amicable, around 45,000 people search the word ‘divorce’ online in January, more than any other month. Divorce is also on the minds of the Government of Jersey, which is currently consulting on proposed changes to its 70-year-old divorce law. At present, grounds for divorce in Jersey are based either on a period of separation – the spouses do not live together – or on ‘fault’, where one spouse declares the other has committed an act such as adultery. There are two periods of separation in relation to divorce – the spouses have lived apart continuously for at least one year if

both spouses agree to get a divorce, or the spouses have lived apart continuously for at least two years if only one spouse wants to divorce. These periods are higher in England and Wales, at two years and five years respectively. The consultation – which began in November 2018 and closed on 22 February 2019 – is looking at moving to a no-fault divorce system. It also covers removing the three-year bar, which means you must be married for that period before filing for divorce. It is currently only one year in England and Wales, and there is no time limit in Guernsey. In addition, it is considering introducing joint filing and ending the requirement for unhappy couples to live separately. “Jersey’s divorce law, the Matrimonial Clauses Law 1949, is out of date,” says a spokesperson from the Government of Jersey. “It does nothing to minimise conflict among divorcing couples. It requires one

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to divorce the other, as opposed to joint divorce, and, if the divorce is not based on a period of separation, it must be based on fault grounds. This requires one spouse to say the other has done something wrong. This is often unfair and unnecessary as it has no bearing on any subsequent financial settlement.”

ASSESSING OPINION Although this issue of Businesslife went to press before the outcome of the consultation was known, a January 2018 survey gives some clues as to which way the responses might go. Conducted by the Government of Jersey to understand more about public attitudes towards the island’s divorce laws, it found that 66% of the 972 respondents felt nofault divorce should be introduced and 60% wanted the three-year ban lifted. The government plans to analyse responses to the consultation and publish

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the results within eight weeks of the consultation deadline. Advocate Victoria Myerson at Jerseybased law firm Myersons, says these are “long-awaited changes”. She identifies the potential introduction of no-fault divorce as particularly positive. “Having a fault-based system means that one party involved in a divorce has to take the blame,” she says. “Life isn’t black and white, it is grey, and although a marriage might break down ultimately because one party is unfaithful or just wishes to leave, what led to this point is often more complex. Nevertheless, it’s rare that both parties are going to agree that one of them was exclusively to blame for the marriage breakdown.” The difficulty with the fault-based system, she adds, is that from the very outset, an “adversarial blame game” is being created. “Dealing with arrangements for the

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Divorce law

march/april 2019 47

Divorce law

48 march/april 2019

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Divorce law

Guernsey gears up for change children and how the finances are divided is the most timeconsuming and expensive part of such proceedings,” Myerson continues. “The reason behind the breakdown of the marriage is relevant to how the assets are divided in only the most exceptional circumstances. But with the added emotion and acrimony of the fault-based system, it makes it much harder to get parties to reach agreement. “This extends the length of their proceedings and increases their legal fees, which means there may be less to provide for the family. We see these kinds of disputes regularly and it causes unnecessary expense and distress.” No fault divorces will, she hopes, also help more couples to agree matters such as levels of child maintenance and division of assets without having to go to court. “Reaching agreement in this way can keep costs and tensions down and provides parties with greater control, rather than having a judge at trial determine the outcome,” she explains. Myerson is also in favour of joint-filing. “This may encourage better co-operation when it comes to resolving other issues,” she states.

The States of Guernsey launched a targeted consultation in 2018, which could lead to potential divorce reform. Responders suggested that the time it took to divorce without ‘fault’ should be shortened from the current two years with consent and five years without consent for divorce by separation. They did not believe that the divorce process was too long, but that the costs were too high. They supported some form of cap or fixed fee arrangement to provide greater certainty. The States was due to issue a public consultation on outline proposals for change in February.

Reaching agreement can keep costs and tensions down and provides parties with greater control, rather than having a judge at trial determine the outcome

CRITICS’ CONCERNS Rose Colley, Family Law Partner at Viberts, is less enthusiastic. She is concerned that removing the three-year bar and introducing no-fault could make divorce “easier and quicker”, thus jeopardising personal finances. There is a fear that one party may be forced into agreeing a divorce they may not wish to enter, and which may not be in their best interests, if money is tight and they can’t afford lawyers. “A one-year period of separation can help you sort out issues such as how the assets will be divided and how the children will be financially maintained,” she says. Lauren Glynn, Senior Associate and lead family practitioner at Carey Olsen in Jersey, is also surprised that the reforms are not specifically designed to reduce the cost of divorce, and that there are no proposals within the consultation relating to the reform of how matrimonial finances and arrangements for children are dealt with. “In truth, a simple divorce is not hugely expensive. It can be, and frequently is, dealt with by the parties themselves, without lawyers. It is when the parties are unable, or refuse, to reach an agreement in relation

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to their finances or their children, or want to point the finger at the other, that things really get expensive,” she states. Colley says she wanted the consultation to go further. “In an English divorce, if you are a male police officer with a £500,000 pension pot, then you can share or split it in a way whereby your wife can set up her own pension scheme,” she explains. “She takes half, and it means that other assets, such as your house, can be normally divided. “In Jersey you can’t do that. All you can do is offset the pension against other assets. So, in the same example, the wife would get the house and the husband would be left with his illiquid pension pot. This causes a lot of hardship for clients.” She also points out that the consultation fails to address the disparity between Jersey and England and Wales when it comes to property rights. Jersey does not have the equivalent of Matrimonial Home Rights, which protect a husband, wife or civil partner from being evicted by the other spouse without a court order. Often, during a separation, the person

who owns the property in their name may look to sell the family home without the agreement of the non-owner spouse. In such cases, the non-owner can register their Matrimonial Home Rights with the Land Registry. “This gives a warning to any potential purchasers that the other spouse has an interest. In Jersey, you can’t do this,” Colley says. “Jersey’s housing rights laws are strange and complex, so a husband could have rights to live here and not a wife. When they split, that can cause hardship.” Unsurprisingly, Colley is ambivalent about whether Jersey will now be a financially better or worse place to be divorced, citing little real change. “We need a wholesale look at divorce laws and other issues such as housing rights,” she states. Glynn is more optimistic. “Without having to play the blame game and putting the parties on an equal footing, they will be able to get through the process less scarred, financially and emotionally.” n DAVID CRAIK is a freelance writer

march/april 2019 49

The Savills property review: an upbeat outlook for 2019 With all eyes firmly trained on the Brexit negotiations between the UK Government and the EU Council – and with the scheduled exit date of March 29th looming – there may finally be some conclusion to the property market uncertainty which has undoubtedly affected the mainland over the past year.

As the ‘divorce date’ has drawn closer, many vendors and applicants have chosen to postpone large financial decisions until a clearer picture emerges of the deal which Britain will walk away with from the EU negotiating table. However, while that uncertainty has naturally been felt to a degree within the Jersey property market and in particular within the prime market, trading figures for 2018 illustrate a more positive position. A total of £940 million in residential property transactions was achieved last year, up on 2017’s figure of £837 million, showing an increase in both unit

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numbers and average unit prices. 2018 sale transactions reflected a similar story to 2017 in terms of mix, with 87% of sales being for properties at under a million pounds, compared to 90% the previous year.

Savills achieved 50% of the £5 million plus market in 2018, a figure we are rightly proud of. In the rest of the UK, last year’s property market proved to be highly regional, with prices softening in London and the South East, while the Midlands, Wales and the North all experienced growth. Overall, annual

house price growth was minimal at 0.5%; however, with central London values down by 2.2% and with the outlook for the coming year predicted for further reductions in value across the capital, Savills expects to deal with a growing number of relocation enquiries - a market sector which has remained buoyant during 2018. On the subject of the relocation market, it has been interesting to note that the past year has seen interest not just from UK nationals but also further afield from Europe, as individuals are seeking long term financial security for their investments, given the changing face of the EU and

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Geri Geri O’Brien O’Brien which which is testament is testament to our to excellent our excellent Director Director One One thingthing that that is likely is likely not to not to reputation. reputation. 01534 01534 722227 722227 change change is theischallenge the challenge faced faced by by gobrien@savills.com gobrien@savills.com “While Jersey Jersey has always has always beenbeen young young people people in order in order to get to aget first a first “While popular with with high high net worth net worth foothold foothold ontoonto the property the property ladder. ladder. popular individuals looking looking to relocate to relocate theirtheir The strength The strength of the ofprices the prices in the inone the one individuals Sara Sara Kempster-Smyth Kempster-Smyth businesses and families and families to the toisland, the island, to two to bedroom two bedroom sector sector compared compared businesses Residential Residential SalesSales Negotiator Negotiator we have we have recently recently also also seenseen increased increased to average to average wages wages for those for those agedaged 07797 07797 722694 722694 interest fromfrom business business owners owners of of thirtythirty and under and under means means that that without without interest sksmyth@savills.com sksmyth@savills.com a more a more entrepreneurial entrepreneurial nature, nature, familial familial assistance, assistance, gathering gathering the the bringing bringing with with themthem a fresh a fresh outlook outlook necessary necessary levels levels of funds of funds to meet to meet Debbie Debbie Le Brun Le Brun and perspective and perspective which which can only can only be be the deposit the deposit figures figures demanded demanded by by Residential Residential SalesSales Negotiator Negotiator newsnews for the forlocal the local business business the leading the leading mortgage mortgage operators operators can can goodgood 07797 07797 754380 754380 be a be seemingly a seemingly impossible impossible mountain mountain community community and the andisland the island as a as a debbie.lebrun@savills.com debbie.lebrun@savills.com to climb. to climb. However, However, this in this turn in turn has has whole.” whole.” driven driven a robust a robust rental rental market market offering offering excellent excellent opportunities opportunities for investors, for investors, Savills Savills has has alsoalso recently recently with with average average annual annual yields yields of between of between completed completed the acquisition the acquisition of the of the 4 and 45 and per5 cent. per cent. any potential any potential fallout fallout fromfrom Britain’s Britain’s departure. departure.

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Management structures

Chief Storyteller

Chief Happiness Officer Chief Troublemaker

Whatâ&#x20AC;&#x2122;s in a name? The corporate world has witnessed an explosion of unusual job titles in recent times, thanks to the increasing complexity of organisations and the influence of technology. Whatever the name, though, collaboration is key to getting the job done

Chief Heart Officer

Customer Engagement Chief Marketing officer

52 march/april 2019

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Management structures

Chief of e Knowledg

CREEPING AMERICANISATION So, what’s in a name – and are the titles a company chooses arbitrary or do they have a greater significance? In the UK, adoption of the C-suite is a relatively recent development and is not yet universal. Charles Clarke, a former KPMG Partner and now Consultant with Channel Islands executive search firm Thomas & Dessain,

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says: “There’s a creeping Americanisation in the language we use and, in this case, it reflects the flat hierarchy approach many US companies favour, in which everybody is chief of something.” Tech companies in Silicon Valley started by bright people with diverse skill sets have been instrumental in inventing forwardlooking job titles. Some of those adopting similar roles over here may hope a little of the kudos will rub off, says Clarke. Nevertheless, he adds, it’s important to distinguish between the job title and its content. “Under the UK corporate governance code, someone who’s a statutory Director of a company has formal authority and responsibility. “It might help a little bit with recruitment to offer more exciting job titles, but someone looking at a job description closely would probably see through it if there isn’t genuine substance behind the implied responsibility the name gives.” In Clarke’s view, whether you call the most senior executive the CEO or the Chief Executive or Managing Director, it’s the same role. What makes it confusing is that some organisations – especially banks – have taken the title ‘Managing Director’ and given it to less senior executives. “In the boom years, everyone wanted to sound important,” says Clarke. Equally, CFO is often pretty much synonymous with Finance Director and COO with Operations Director, in the sense that these are often the most senior person in that role in the company.

INCREASING COMPLEXITY However, Charlie Grubb, Managing Director for Robert Half Executive Search UK, points out: “As companies grow to a mid-sized business, you do tend to find that Director roles morph into COO or CFO. That’s because they now have bigger teams and greater complexity of leadership is required.” That’s when an organisation might appoint a COO, with individual Operations Directors for each division reporting to them, for example. The C-suite is not the same as the board, but it does have

march/april 2019 53

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Words: Alexander Garrett

ALFRED SLOAN, CELEBRATED President, Chairman and CEO of General Motors (GM) from the 1920s onwards, is sometimes credited with having invented the idea of the C-suite. In the process of turning GM into the world’s largest company, Sloan created a new prototype for senior management, distributing the profit and loss responsibility across the managers of his key business divisions, but bringing them together regularly to decide on matters above the divisional level. Other companies followed suit, establishing a central leadership team that would manage the individual divisions and jointly make key corporate decisions, including investment and strategy. The model lasted for 60 years or so until the 1990s, when new senior job titles started to emerge that had a more functional tone. The new roles had names like Chief Financial Officer (CFO), Chief Operations Officer (COO), Chief Technology Officer and Chief Talent Officer. Scroll forward another 20 years and the profusion of job titles at the top company level – on both sides of the Atlantic – is unprecedented, not just in diversity but in the number of individuals reporting to the average CEO. Look through any listing of senior vacancies and you’ll find openings for chiefs in marketing, technology, knowledge, information, creative, customer engagement, experience, digital transformation, compliance, risk, diversity – the list goes on. And that’s not even including the more whacky titles like Chief Happiness Officer (online shoe retailer Zappos may have invented this one), Chief Heart Officer, Chief Troublemaker or Chief Storyteller.

Management structures

a similar remit to oversee the entire organisation, look forward and make those important decisions about strategy, investment and resources, rather than simply manage operations. President is another title that can be confusing. Malin Nilsson, Managing Director at Duff & Phelps, says: “You will often find someone with the title President or Founder when there have been two founders of the business who can’t both have the top job, or when the person who is the founder has brought in a CEO. Their role is to make sure the firm is fulfilling their strategic vision, but the day-to-day reins remain with the CEO.”

GROWING ROLE OF TECH The newly invented roles that are becoming popular tend to reflect the evolution of business and, in particular, the growing role of technology. Grubb says: “A classic example is that as technology allows us to procure more services or products, it’s not through the traditional sales route and, therefore, you need someone to understand what the customer experience is. So that’s why you have roles like Chief Customer Engagement Officer or Chief Customer Experience Officer – it’s trying to put a focus on what’s critical to the company now, rather than what might have worked 10 to 20 years ago.” The nature of the organisation is likely to determine which roles it will elevate to the C-suite or the executive team. A consumer goods company may opt for Chief Marketing Officer or even a Director of Branding; a firm in a heavily regulated industry would definitely need to consider putting risk or compliance in the spotlight. And technology has spawned

54 march/april 2019

the roles you choose to appoint and include in your top team send out signals – both internally and externally – about where your focus lies

multiple senior roles – Chief Technology Officer (CTO), Chief Knowledge Officer, Chief Information Officer (CIO) and Chief Digital Officer (CDO), to name a few. If you’re a technology company and technology is your business driver, it makes more sense to appoint a CTO, says Clarke. If you’re a bank whose requirement is to maintain legacy systems, a CIO might be more appropriate. CDO has become popular in the past few years as the idea of digital transformation takes hold. What seems clear is that the roles you choose to appoint and include in your top team send out signals – both internally and externally – about where your focus lies. Just when a growing company should expand the executive team is a moot point. “The model answer is that you should have

the ideal structure from the outset,” says Nilsson, “because it sets the tone and the culture. Once you’re up and running, it’s very difficult to change people’s way of working and their reporting line.” However, in reality, companies have limited resources when they are smaller and people tend to wear different hats, so, inevitably, expansion of roles takes place some way down the line.

WORKING TOGETHER Making it all gel is a different matter. You can have as many chiefs as you like, but if they don’t work well together and understand their own responsibilities as well as each other’s, there’s scope for it to go wrong. It’s like sailing, says Nilsson. “You need a skipper, who sets the course, a helmsman who’s going to keep you off the rocks and get you there, and everyone else has to know what they have to do. If you hit a stormy patch, you get through it together as a team.” In practice, there are bound to be overlaps. “You have absolute responsibility for achieving the goals in your area,” says Grubb. “But often the complexity of business nowadays means you can’t have just one person owning it. You need a collaborative approach where you may have two or more functions working together to produce the ultimate service.” And finally, when you do onboard that new member of your executive team, make sure to introduce them to the Chief Induction Officer. That’s the person over there on reception, by the way. n ALEXANDER GARRETT is a freelance business writer

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FOR EDITORIAL QUERIES, CONTACT eila.madden@blglobal.co.uk FOR ADVERTISING, EMAIL CARL.METHVEN@BLGLOBAL.CO.UK march/april 2019 55

Data protection

Transition mission

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Data protection

One year on from the introduction of GDPR, a period of transitional relief – aimed at giving firms more time to comply with some aspects of the regulation – is coming to an end. What’s the impact of the new rules? and are you ready for the next deadline? Words: Jon Watkins

change in data privacy regulation for 20 years’, the European Union’s General Data Protection Regulation – or GDPR – came into force last May amidst considerable consternation. At its core, GDPR was introduced to standardise data protection rules for all companies operating in the EU, wherever they’re based – with the aim of giving people more control over their personal data and ensuring businesses can benefit from a level playing field. However, with many media outlets and consultancy businesses seizing on the maximum penalty for non-compliance – up to €20 million or 4% of annual global turnover, whichever is higher – the run-up to implementation was a period of great concern for many businesses. Despite that, Dr Jay Fedorak, Information Commissioner for Jersey, says implementation of the new GDPR regulation has been smooth for most. “The evidence I’ve seen is that [management of the GDPR process] has been positive,” he says. “The companies I’ve talked to have exceeded my expectations with their commitment to implementing the requirements. It’s been very pleasing. “People in the community received these threats that they would receive significant fines on day two if they weren’t 100% compliant on day one, but those fears were certainly unfounded.” Elaine Gray, Partner and Head of the Dispute Resolution and Litigation group at Carey Olsen in Guernsey, agrees that

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implementation has been relatively smooth. “In the lead-up to implementation, there was a good understanding that change was afoot. There is, generally, a high level of compliance. We’ve been instructed on a few data breach queries and on data access requests but, on the whole, companies have got their processes in place, they’ve done their leg work and it’s working pretty well.”

A NEW DEADLINE IS COMING Although May 2019 marks 12 months from the introduction of GDPR, it will also mark the end of ‘transitional relief’, a one-year grace period provided to Channel Islands firms for some areas of compliance with Jersey’s and Guernsey’s GDPR-equivalent laws. The transitional relief period was brought in to give local organisations time to fully prepare for these more complicated areas, including impact assessments and data portability, whereby all islanders will be legally entitled to ask an organisation that holds their personal data to transport it to another organisation in a format that’s easy to download, organise and tag and can be machine-read. While Fedorak is pleased with firms’ general progress to date, he warns against complacency in the lead-up to the May 2019 deadline. “Data controllers need to make sure they are impactassessment ready by 25 May 2019, which is not far away,” he adds. “By then, systems, documentation, policies and procedures must meet the requirements of the Data Protection Jersey Law

What issues might your business face? What issues and challenges might Channel Islands businesses face once transitional relief ends on 25 May 2019? Richard Field, a Partner at law firm Appleby in Guernsey, explains the types of queries and challenges that have already been raised since GDPR was introduced last year. “We’re seeing a lot of businesses working on their websites and privacy notices, and on data protection in the context of technology projects. There have been a lot more examples of businesses saying: ‘We’d like to introduce an online portal for our customers, but we’re concerned about the data protection aspect’ and they’re raising that from the very beginning rather than at the end. “We’re seeing a growing number of subject access requests from individuals trying to find out information about what’s being held on them. We’ve seen a few data breaches, a little enforcement work – although that’s very collaborative in its nature. And we’ve seen quite a lot of thinking around international transfers, particularly in the context of Brexit and what might happen in the UK. “I think, overall, the number of queries has been pretty broad and not hugely out of line with what we might have expected – but these issues are certainly a good indication of the types of issues for which companies need to be prepared come 25 May 2019.”

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BILLED BY SOME as ‘the most important

Reaching the minds other publications canâ&#x20AC;&#x2122;t reach

BUSINESS LIFE

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Data protection and Data Protection Authority Law. Time is of the essence.” Gray agrees. “The transitional arrangements did not give everyone a ‘Get out of jail free for a year’ card,” she says. “Many of the transitional elements dealt with information companies already held before the new regime came in, and allowed you to continue working with that information as long as you met certain conditions. “Information that was held before 25 May 2018 is what we call pre-collected data. Under the new regime, companies will have to give a lot of information about what data they are getting from people and why, so they should be spending their time now making sure they’ll be able to do that when the new date passes.” Mel Pardoe is Data Protection Officer for BDO in Jersey, which includes Channel Islands IT consultancy C5 Alliance, and is responsible for monitoring GDPR compliance within her organisation. She says the key to successful implementation for her team has been making GDPR “business as usual” rather than a “project with an end date”. “GDPR is partly a cultural issue, with constant requirement for training and adaption,” she says. “Of course, there are also lots of practical things to do – updating contracts and other paperwork, undertaking training activities to raise awareness within the business, updating databases, testing systems and processes and so on. “Transitional relief was introduced to help businesses proactively change the way they do things – to give time to embed new procedures such as impact assessments. It’s not an extra year or ‘grace period’ to implement GDPR or a reason to postpone

By now, businesses should already feel they are prepared, and that they are not racing to meet another deadline

compliance,” she adds. “By now, businesses should already feel they are prepared, and that they are not racing to meet another deadline. If they are still concerned about the systems and processes they have in place, they are probably behind where they should be.”

EVERYDAY LIVES Emma Martins, Data Protection Commissioner for Guernsey, agrees that businesses should be treating GDPR as a ‘cultural issue’. She adds that the rise of social media channels and greater awareness generally of the role that data plays in people’s lives has helped organisations understand why compliance is important. “In the past, regulation and compliance has been boxed off in organisations – with the compliance officer often sat in an office at the end of the corridor and

everyone in slight fear of them,” she says. “Nowadays, however, all of our lives are ‘data-fied’. Whether you’re going to your doctor, messaging friends, buying something or travelling, you are leaving a data trail, which gives an extraordinarily detailed view of you. “It’s a part of every single moment of all of our lives. People now understand that far more, so there’s greater awareness that this is a profoundly important issue. Companies are seeing that this is not a clinical tick-box exercise.” For those companies that feel they are not on track for the end of transitional relief, Martins says her office is keen to engage and to work with them to achieve compliance. “We want people to comply with this out of enlightened self-interest as opposed to fear of the regulator and of fines,” she adds. “So, in terms of our outreach, we want to do more. We held a networking event for data protection officers alongside the Europe-wide Data Protection Day that took place in January. And, as we get more resources available to us, we’ll continue to do more outreach work like that. “The key, however, is that businesses really need to buy into this from the top. Boards that have little or no expertise in this area are quite dangerous, so executive and non-executive directors have a huge part to play in setting the tone within businesses to ensure this issue of data is treated with the importance and seriousness it should be.” n JON WATKINS is a freelance writer

GDPR: The modern-day Millennium Bug? The Doomsday-style coverage given to GDPR – including the maximum potential fines that companies could face – was reminiscent of the scaremongering that took place in the lead-up to the year 2000, when many warned that computers hit by the so-called ‘Millennium Bug’ would lead to planes falling out of the sky and other catastrophic events. “A lot of the noise around the fines was largely driven by a bandwagon mentality of ‘here’s the next big thing that we can make some money out of’ from a bunch of so-called experts who appeared out of the woodwork,” says Richard Field, Partner at law firm Appleby in Guernsey. “If those consultancies had acknowledged the actual situation, based on what had gone on previously, they’d have realised that companies getting those huge fines were few and far between.” Elaine Gray, Partner and Head of the Dispute Resolution and Litigation group at Carey Olsen, Guernsey, agrees there was a

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level of hysteria, but adds that it helped to put the issue on the agenda for many businesses. “I think there’s a sense that implementation was going to be an ‘Apocalypse Now’ scenario,” she says. “It certainly wasn’t for most of the companies that we deal with, advise or interact with. However, what I think that high profile did, in a way, was to raise awareness among companies of the issue and that it was something they must look at. “At the end of the day, we live – and should live – in a properly regulated space. Information is the new currency and when it’s abused, it has so much impact. So, although the headline potential fines didn’t apply to most, it was right to raise awareness and to warn people about it. There were some that overdid it, but I think the context in many cases was right.”

march/april 2019 59

Remote working

The pros and cons of

virtual teams

It’s not uncommon today for people to work in teams that they never meet in person. but Behind the perceived benefits, employers need to mitigate the potential downsides of remote working

Words: David Burrows

60 march/april 2019

IMPROVEMENTS IN TECHNOLOGY mean it’s

feasible for people to move to another continent and still work efficiently. In fact, many companies are setting up small, global teams that work closely together, but seldom meet. Does this represent progress for both employees and employers? Or is it just a way for companies to reduce office costs? Carly Parrott, Counsel in the employment team at Carey Olsen in Guernsey, thinks there’s far more to it than that. “Technology is an enabler – its constant development fosters and supports remote and flexible working that’s focused on output and productivity. Teams can now be virtual. Employers can radically increase their talent pool by recruiting globally and ensuring their teams have the right people with the right skills in the right jobs, irrespective of location.” She adds that this is particularly relevant to Guernsey, where local skills can be restricted and the possibility of recruiting

and bringing skilled workers into Guernsey is often difficult. Jensen Nixon, CEO of tech R&D company Web Administration Resource Management (WARM), takes a similar view towards Jersey, arguing that global working is as much about employee recruitment as retention. “In Jersey, we have a limited talent pool and companies that consider remote working can benefit themselves and the employees,” he says. “From enhanced productivity, fewer distractions and higher savings, to better retention rates, geographical expansion and penetration of new markets, there are multiple benefits of working with a distributed team.” However, remote and flexible working only works if an organisation has three key ingredients – trust, mutual purpose and connectivity. Parrott believes that if one of these factors is missing, it simply won’t stick. And when it comes to connectivity, location remains important.

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Kate Le Blond, Inward Investment Development Manager at Locate Jersey, provides some insight. “We’re seeing increasingly that the digital infrastructure Jersey can provide is having an impact on decisions to relocate business operations here. Having a robust digital platform and a strategic vision for a digitally enabled society in place has been a game-changer for Jersey, and we continue to see it as being a core part of our proposition for businesses looking to relocate here in the years to come.”

SECTOR APPEAL Are there specific industries more suited to remote working than others? John Davison, CIO of Guernsey-based First Central Insurance & Technology Group, suggests non-customer facing roles are good candidates for distributed working. “And the technical industries are very well suited to remote working,” he adds, “because code is uniform; you can be from any background and speak any language, but you’ll write the same code.”

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Parrott agrees that technology, IT, finance and accounting roles are particularly suited, as well as marketing. But she points out that, increasingly, industries such as teaching, transcription, travel and hospitality are becoming forerunners of flexible working. Richard Sheldon, Group Partner in the Guernsey office of Appleby, says one of the key advantages of global working is being able to provide clients with a 24/7 service. “With a global team – someone in Asia, Europe and the Americas – you’re able to service a client around the clock. This is so much more attractive to a client than working with a company that works nine to five from an office in London.” From an employee perspective, studies suggest that flexible working is more sought after than salary. Parrott believes such freedom of choice leads to empowerment and that, in turn, leads to engagement. “Retention levels are higher and morale is more positive,” she says.

“Budgets are healthier (as less physical office space is needed) and employee costs are down (since related travel and working costs are reduced) – it’s a win-win. Declines in stress levels have also been shown, and a dramatic drop in mental health issues and absenteeism.” Nixon agrees that reduced office costs are an obvious consideration, but says they are seldom the driving factor. “Yes, remote working is a way of keeping costs down, but just as important is that it allows employees more autonomy and engenders greater loyalty.” Nor does he believe that there is a tradeoff with regards to productivity levels. Nixon points to Sweden, where remote working has been strongly supported for more than 10 years now. “The productivity levels from those working remotely in Sweden is phenomenal. It’s time we look to other economies and see if we can learn a lesson or two from our neighbours and create better work/life balance for all.”

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Remote working

Some flourish bouncing ideas round the water cooler and engaging with colleagues. With remote working, employees must take charge of their own productivity

A good work/life balance is a vital element in recruitment. Flexible hours are increasingly a prerequisite for jobhunters in a job spec, as is the option to work from home – wherever that may be. By taking the costly and time-consuming daily commute out of the equation, Sheldon explains, employees can give their company a few extra hours by working from home. At the same time, they are able to see more of their family, so it can be a beneficial arrangement for both sides. But there are disadvantages to remote working too. True, there may be reduced head office costs, but there is also the requirement for significant investment in communications and technology. As Davison explains, it can also make staff progression and career development harder as it can be challenging to move people into management roles if they don’t have a fixed base. The team dynamic can take longer to form, too, as bonding and relationships are slower to develop. From a corporate perspective, he adds, it’s harder to instill a set culture

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or corporate values. There are also practicalities around information and cyber security. “If you want your business to be able to work in multiple locations, ideally you set up this landscape at the start,” Davison says. “It’s much easier than introducing it later. It’s hard to create multi-location teams in an existing business that’s never done it before as all of the processes, procedures and tech may not be suited to operations that span multiple locations.”

THE HUMAN TOUCH There’s also a danger that remote workers can feel isolated and under pressure in a different way to their nine-to-five peers. As Parrott points out, remote working is not for everyone. “Some people need human interaction, and the accountability that follows. Some flourish in the ability to bounce ideas around the water cooler and engage with their colleagues. With remote working, employees must take charge of their own productivity. “In turn, their employer needs to set meaningful and realistic key performance indicators (KPIs) that are tailored to them, and trust they will be getting the job done. Employees are accountable for achieving those KPIs, which takes self-discipline, and is not everyone’s cup of tea.” Sheldon agrees that performance and personnel management are potential problems. “If an employee is not performing well, traditional management techniques fall down. Performance management is not just about getting rid of people, it’s about support and training.” He adds: “Remote working from globally spread offices can be quite isolating, especially with small teams. Human interaction is important. “The companies that implement remote working best are those that get the mix right – using video conferencing to ensure people feel part of a team and ensuring

employees come together periodically.” With this in mind, Appleby organises a staff event in London each year where all team members from offices across the world attend. The event has a business angle, but it also gives representatives from within the company a chance to meet and share ideas. Meaningful interaction and engagement are crucial. The long-term success of global working largely hinges on an effective remote manager providing sufficient support to their team and giving them the right tools and space to do their job. The managers must be effective communicators and sensitive to cultural differences, and ensure everyone knows what’s expected of them and when. They should be available whenever needed and make time for face-toface meetings where possible. But there are limitations. From an HR viewpoint, it’s harder to conduct appraisals because performance is harder to track. As Davison points out, although people who work remotely tend to be self-sufficient (which is a positive), if there’s a problem, the HR process can be more complicated. “I’ve noticed that if you have a team member who’s less constructive than others, if you’re all sitting on the same floor the problem tends to resolve itself naturally,” Davison observes. “Remote teams that encounter the same problem don’t self-fix or it takes longer. To remedy this, my teams are set up to be collectively responsible. There’s an ethic in the team that they either ‘all succeed’ or ‘all fail’, so negative behaviour is tackled internally through shared accountability.” There’s certainly no shortage of legal questions for employers planning to work remotely. Where do an employee’s employment rights exist? How do those rights correlate with an employee’s statutory rights in their place of residence? Which rights are more relevant and can you apply global policies to local employees? What health and safety risks arise from remote working? There are also potential issues over managing sickness and absenteeism, or disciplining an absent employee. All of these difficulties can be dealt with, but employers need to be aware of their responsibilities and commitments and plan for them. As Parrott explains, the contract of employment and having appropriate policies in place is fundamental in not only defining rights and obligations, but in having clear policies for remote and flexible working, personalised KPIs and periodic performance reviews. “These are critical,” she concludes, “in ensuring that expectations are set and managed, and that everyone is working from the same page.” n DAVID BURROWS is a freelance finance writer

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64 march/april 2019

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The

Knowledge Brain food for the busy business professional

The Knowledge is compiled by Alexander Garrett Meeting hell

Talking

points Feeling insecure

More than half of Channel Islands organisations don’t know whether they’ve been hacked in the past year. So says the first cyber security survey of businesses across the islands, carried out by the Channel Islands accounting and consulting practice at Grant Thornton. Nearly one in five of the companies studied have no plans to review their information security and almost a third have no member of staff nominated to look after this area. More than 2,000 enterprises, offering a good representation of the islands’ business profile, were invited to take part in the survey. The report’s author and senior consultant in information security, David Cartwright, said that on the plus side, over two-thirds of respondents provide information security training at least once a year to all staff. But he added: “Overall, a third – perhaps many more – of Channel Islands organisations are potentially more vulnerable than the rest to cyber attack and, frankly, are doing nothing about it.”

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More than two thirds of business meetings are deemed pointless, according to research by scheduling platform Doodle. The company interviewed 6,500 professionals across the UK, Germany, the US and Switzerland for its State of Meetings 2019 report, and found that professionals spend two hours a week in pointless meetings on average, adding up to a staggering £425bn worth of resources. Some 37% of respondents considered meetings to be the biggest cost to their organisation. Participants also said they preferred faceto-face meetings to calls or video chats, and 70% said they would opt for mornings as the best time to hold a meeting. Among the biggest complaints were people texting during meetings, people not listening to the person talking and interrupting each other, and late arrivals.

policymakers to champion and highlight women-owned businesses in order to help develop a national infrastructure that supports women’s enterprise.

Wake up and smell the coffee

If you enjoy your morning brew, take note. More than half the world’s wild coffee species are at risk of extinction, including the popular Arabica and Robusta strains, according to scientists at the Royal Botanic Gardens at Kew in London. The threat comes from climate change and deforestation. Researchers found that current conservation measures will not protect coffee’s long-term future. Aaron Davis, Head of Coffee Research at Kew, told Reuters: “As temperatures increase and rainfall decreases, the suitable area for growing coffee diminishes.” Targeted action is urgently needed in forested areas of specific tropical countries – notably Ethiopia – which are being hit hard by climate change.

The X factor

Only one fifth of the six million businesses in the UK are run by women and, when it comes to starting a new business, there are twice as many male entrepreneurs as female, according to new research led by the University of Dundee. The university worked alongside the University of Strathclyde to examine why women are under-represented in small businesses – and whether enterprise policy is responsible. They found it may be better to make the economic case for female entrepreneurship, rather than treating it as a diversity issue. Efforts to increase the number of female entrepreneurs in the UK have been restricted by ever-changing political priorities, the study found. It calls upon

Insta slam

Photo-sharing app Instagram has taken over from TV as the best way to reach young people, according to research by US financial services firm Cowen. The company surveyed 50 media buyers with a combined spending power of $14bn. They were asked to identify the primary platform for a new branding campaign aimed at two age groups: 13 to 34 and 35-plus. For the younger group, Instagram was first choice for 61%, with TV chosen by just 3%. Among the older group, TV still came out on top.

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THE KNOWLEDGE

Best of… BOOKS

Small is beautiful

Girl power

Company of One: Why Staying Small is the Next Big Thing for Business by Paul Jarvis (Portfolio Penguin, £10.49*, paperback) starts off with a contrarian hypothesis: what if the key to a rich and fulfilling career is not to start a business and rapidly scale up, but instead to find what you can do most profitably and remain a sole trader? The idea is to make your business better rather than bigger, remaining in control of your time, avoiding the inevitable headaches that come from getting bigger and establishing a working lifestyle that’s sustainable. That’s somewhat counter to the usual orthodoxy that to chase growth, you need to leverage greater scale and bring in competencies that you don’t have personally. But drawing on a range of case studies, Jarvis shows that staying small can have its own rewards. *Amazon, RRP £14.99

Now out in paperback, A Good Time to be a Girl (HarperCollins, £9.99) is a kind of manifesto for career women, written by one who should know. Dame Helena Morrissey is one of the best-known women in the City, Head of Personal Investing at Legal & General and Chair of the Investment Association. She’s managed billions of pounds in assets, founded the 30% Club to get a higher number of women on boards and, most remarkably, she’s done it all while having nine children along the way. This book tells us how she did it, while arguing for a more humane version of capitalism. Though most would struggle to follow her example.

Not so generous

The big data grab

Just Giving: Why Philanthropy Is Failing Democracy and How It Can Do Better by Rob Reich (Princeton, £22, hardcover) has billionaires who set up charitable foundations squarely in its sights. These wealthy individuals who give away their money are generally applauded for doing so. But Reich’s contention is that they aren’t quite so generous as it seems. Big philanthropy, he says, is often an “exercise of power”, using private assets to buy public influence – and influence that’s largely unaccountable and comes with lavish tax benefits. In the US, philanthropic foundations pay no tax on their investments or property, yet there’s little test of how effective they are, argues Reich. As he concludes: “The practice of state-supported philanthropy, especially in the United States, is indefensible.”

If you’re troubled by issues of data privacy, then Shoshana Zuboff’s new book, The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power (Profile Books, RRP £25, hardback), is a must for your bedside table. Zuboff is a professor emerita at Harvard Business School, and she invented the concept of ‘surveillance capitalism’ to reflect the huge emerging economy that consists of taking personal data and leveraging it for commercial advantage. The real customers of Google and Facebook are not the consumers who sign up, but the advertisers who use their data, she argues. This has led to a new kind of power – instrumentarianism – whereby surveillance capitalists can not only monetise consumer data, but can also use it to predict and modify behaviour. And it’s not just US tech titans who are to blame; the Chinese government has its own programme to monitor citizens and manage their behaviour. All prices are publishers’ official prices, except where stated

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In numbers: Climate change PODCASTS

2.7%

The rise in carbon emissions in 2018, mainly due to emissions growth in China, India and the US. Source: Global Carbon Project

60%

3.5 degrees Just launched by Facebook is an original podcast series on entrepreneurship, 3.5 Degrees: the Power of Connection. It presents lessons learnt, challenges faced and other insights from successful business leaders, with a focus on the US. The name reflects the idea that people are no longer six degrees apart but three and a half degrees, thanks to IT. Hosted by David Fischer, Facebook’s VP of Business and Marketing Partnerships, the podcast often matches guests from a startup with someone from an established player in that sector. Available on Apple Podcasts, Google Podcasts, Spotify, Stitcher and TuneIn.

The percentage of global energy consumption still accounted for by oil and coal. Renewable power represents just 3.6%. Source: BP

3.2mm

The amount by which global sea levels are rising each year. The rise has occurred at a faster rate in recent years. Source: NASA

Third sector Third Sector is a new monthly podcast from the magazine of the same name, covering events in the UK’s charitable and voluntary sector. Episode one is on diversity, looking especially at the challenges and opportunities for charities to make their workforces more diverse. Eleanor Southwood, Chair of the Royal National Institute of Blind People, and Kemar Walford, Chair of the Institute of Fundraising’s Black Fundraisers UK group, join Third Sector’s Rebecca Cooney to discuss the issues. www.thirdsector.co.uk

Retirement Café Want to know about retirement options? Run by Christchurch-based MFP Wealth Management, the Retirement Café Podcast offers weekly interviews and guidance on issues such as retirement and wills. Host Justin King, a chartered financial planner and SOLLA (Society of Later Life Advisers)-accredited adviser, says retirement frees people up. “With this new-found freedom can come a lot of fear: fear of the unknown, of what lies ahead, of the person you’ll become and the challenges ageing brings. The podcast aims to help people feel more informed and confident about their retirement.” www.theretirementcafe.co.uk

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2040

The year by which France and the UK plan to ban sales of new petrol and diesel vehicles as a measure against climate change. Norway has given itself a deadline of 2025 and the Netherlands is working towards a ban by 2030.

97%

The percentage of climate scientists who agree that climate-warming trends over the past century are very likely due to human activities. Source: Skeptical Science

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THE KNOWLEDGE

How to… ...Brainstorm What is it? The invention of brainstorming has been attributed to US ad man Alex Faickney Osborn, one of the founders of the agency BBDO. In 1953, he originated a process called ‘organised ideation’ to produce new ideas in the agency, and the participants quickly began referring to it as ‘brainstorming’. Osborn gave much of the credit for his process to Hindu teachers in India. He introduced the term in his book, Applied Imagination: Principles and Procedures of Creative Thinking.

Understand the basics. Osborn’s method runs on four principles: • Focus on quantity: the more ideas generated, the greater the chance of finding an innovative solution to the problem at hand • Don’t criticise during idea generation: the emphasis should be on moving forward with ideas, piggybacking on other ideas, and creating new constructs • Unusual ideas: unusual solutions are welcomed as a way to get people ‘thinking outside the box’ and finding innovative ways to solve the problem • Combine ideas: participants are encouraged to build on concepts and work together to create better ideas through the process of association. Is it the right approach? Brainstorming

Try holding brainstorming sessions in rooms not associated with team meetings. If you can’t change the room, rearrange the chairs

doesn’t suit every kind of problem. “One of the first things you need to determine is whether you need a brainstorming session at all,” says Peter Clayton, Consultant and Founder of brainstorming.co.uk. “A brainstorming session should be used for generating lots of new ideas and solutions, not for analysis or decision-making.”

Prepare. Who are you going to invite to take part? Osborn suggested 12 as a perfect number, made up of both ‘novices’ and ‘experts’ for the question at hand. In advance, share the problem you want to crack, so everyone has a chance to think about it. “Very few people come up

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with their best ideas under pressure, so if you’re leading the session, make sure you give everyone time to prepare,” says Kate Moxon, Digital Marketing Manager at agency Engage Interactive.

try a new room. “Try holding brainstorming sessions in rooms not associated with team meetings,” says Lindsay Kolowich, Digital Marketing Manager at software provider HubSpot. “If you can’t change the room, try changing something to stimulate the brain, such as rearranging the chairs or putting pictures on the walls.” Even more radical, send your people somewhere outside their comfort zone. Lionel Ohayon, Founder and CEO of design studio iCrave, reportedly sends employees to the Burning Man festival in the Black Rock Desert of Nevada each year to enable them to soak up the creative stimulation.

Make it safe. “The key to brainstorming, as with managing a team, is creating psychological safety – a sense of confidence that the team will not embarrass, reject or punish someone for speaking up,” says Neill Hunt of the Defence Entrepreneurs Forum, DEF UK.

Make it democratic. “Everyone should have their own pen and Post-it notes, so no one can dominate the board,” says James Taylor, Founder of training venture C.School. There’s too often a “tyranny of the whiteboard”, he says, where the facilitator chooses which ideas they are going to write down and nobody else gets a look-in. You also need to be aware of people who are less inclined to put their hand up. Some commentators recommend kicking off with silly ideas – maybe get everyone to come up with a name for the brainstorming team, or some unorthodox flavours of coffee – just to make these people feel at ease. Think big. “We follow the ethos that it’s much harder to develop a small idea into something impressive than to scale back

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Business leaders on making it to the top

Getting ahead a big idea,” says Engage Interactive’s Moxon. “We encourage everyone to think big when they come to brainstorms and assume no limitations; sometimes the ‘how’ is easier than you think!”

Take note. The Design Council advises: • State the problem clearly and concisely • Don’t lose anything. Write your ideas on flipcharts or on the wall • Number your ideas and set a target – to get to 100, for example • Keep the focus sharp: edgy and precise statements are better than fuzzy ones • Keep the ideas flowing, approaching the problem from different viewpoints.

Try it on your own. There’s a counterhypothesis that you get better results from brainstorming on your own, rather than in a group. An article in the Harvard Business Review explains this line of thinking, the result of numerous studies: ‘For one, when people work together, their ideas tend to converge. As soon as one person throws out an idea, it affects the memory of everyone in the group and makes them think a bit more similarly about the problem than they did before. In contrast, when people work alone, they tend to diverge in their thinking, because everyone takes a slightly different path to thinking about the problem.’ So, one smart technique is to let people work on their own to start with, then come together to share their ideas. Pick the best. To wrap things up, you need a process to decide which ideas you will take forward. That could mean voting in the group, or you could convene a separate committee, which can look at all the ideas afresh and take an objective view. Either way, the objective is to come up with at least one idea that you can put into practice.

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Amy Bryant, Deputy Chief Executive, Jersey Finance Which piece of career advice would you pass on to your 18-year-old self? Not to spend too much time worrying about what others are doing or comparing your progress with theirs. Instead, figure out what’s important for you, what your priorities are and where you want to be in three, five, 10 years’ time. Then be bold and confident in going about making decisions to achieve that.

What was your biggest mistake and what did you learn from it? I’m very fortunate that the decisions I’ve made over the years have led me to a job I love, which makes it hard to single out a ‘biggest mistake’. But that’s certainly not to say I haven’t made any mistakes along the way! Actually, what I’ve learnt over the years is to embrace things that don’t go so well, rather than turn away from them. Sometimes it might be uncomfortable to do that, but it’ll help in the long run.

Who has inspired you during your career and why? Without a doubt the most inspirational person I’ve worked with is Geoff Cook, until recently CEO of Jersey Finance. I worked with Geoff for more than seven years and, even after all that time, I still learnt something from him every single day. Geoff’s knowledge of the finance industry is unparalleled, and that, combined with leading by example, being passionate about his work, and putting people at the heart of decisionmaking, definitely inspired me to give my best every day. Which skills and characteristics do you think are key to success in today’s workplace? I think resilience and being adaptable. The pace of change in the workplace, particularly as a result of technology adoption, can often be rapid. Being flexible, open-minded and enthusiastic in that environment will always be received positively. In thinking about the future, I think success will come to those who adopt the approach of lifelong learning; being willing to invest in your own future through continual knowledge building.

Do you have a secret for successful networking? The short answer is no, so if someone does, please pass it on! Entering a room full of people you don’t know and striking up a conversation can be daunting, and it certainly doesn’t come naturally to everyone. But it’s worth remembering that while ‘networking’ sounds quite formal, it can be as simple as staying in touch with former colleagues on LinkedIn or arranging a coffee with someone you’ve not seen in a while and catching up on their news.

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THE KNOWLEDGE

GURU

WATCH

Erik Brynjolfsson

as industrialists had to redesign their factories to reap the benefits when electricity first arrived. Brynjolfsson, of Icelandic extraction, has a high-ranking academic pedigree. He studied at Harvard University for bachelor and master degrees in applied mathematics and decision sciences, then took a doctorate in managerial economics at MIT. He rose to prominence in the 1990s through his review of the ‘productivity ne of the biggest changes set to take place in the coming paradox’, a widely accepted hypothesis that technology had failed decades will be the widespread adoption of technologies to boost US productivity. He argued against that and became a such as artificial intelligence and machine learning in the specialist in the link between technology and productivity, as well workplace, automating many processes and jobs currently carried as related topics, including data-driven decision-making. out by humans and potentially making millions redundant. Brynjolfsson has articulated his views in two acclaimed As people struggle to understand the implications of books, co-authored with Andrew McAfee – Machine this, Erik Brynjolfsson’s name is likely to become more Platform Crowd: Harnessing our Digital Future (2017) “Instead of racing and The Second Machine Age: Work, Progress and familiar. He is Director of the MIT Initiative on the Digital Economy, set up in 2013 to explore how Prosperity in a Time of Brilliant Technologies. His against the human society can thrive in an era he has dubbed 2013 TED Talk has had 1.3 million views and he’s in machine, we need the ‘Second Machine Age’. demand as a keynote speaker at conferences. to race with the His view is that technology offers the potential His rising profile partly comes from having a clear machine” to significantly improve productivity and accelerate view of the bigger picture – the societal impact of these human progress, just as the Industrial Revolution did. changes. Brynjolfsson talks of “the great decoupling: of But with it will come challenges – the skills required and productivity from employment, of wealth from work” and how those without these skills can find a new purpose. argues that technology must not leave people behind – “Instead of Brynjolfsson is the go-to guy on these questions. Countries will racing against the machine, we need to race with the machine”. have to redesign their economic systems, he says, and developing In essence, Brynjolfsson offers an optimistic take on one of the countries risk being hard hit because of their reliance on low-skill biggest questions facing human beings – see computers less as a jobs. Corporations will also have to re-engineer significantly, just threat, and more as a partner.

Inbox Infinity

If your email is getting out of control, this one’s for you. Taylor Lorenz, a reporter at Atlantic Monthly, has come up with the idea of Inbox Infinity as a riposte to the well-trodden path to despair that is Inbox Zero (attempting to keep your inbox empty at all times). “The day after Christmas,” says Lorenz, “I spent seven hours sifting through more than 2,700 unread emails I had accumulated over the previous month.” Her intention was to get them down to zero, but she quickly decided on another tack. “In 2019, I suggest you let it all go. There is simply no way for anyone with a full-time job and multiple inboxes to keep up with the current email climate.” Adopting Inbox Infinity means accepting that you will never be able to open most of the vast, growing email traffic that arrives every day. It’s about letting email messages wash over you, responding to the ones you can, but ignoring most. A critical step is to tell those who matter that you will no longer be able to respond to all your emails and, if it’s important, to get in touch some other way. One option is to set up a permanent outof-office, sending all those unwanted messages to somewhere in cyberspace. You’ll feel a lot less stressed.

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Nano influencer Ordinary social media users with1,000–5,000 followers on Instagram, say – which makes them hot enough to be courted by digital marketing agencies. Sweatworking In the words of The Spectator: ‘Any activity that combines exercise with networking, such as going to the gym with business clients.’

BUZZWORDS…

JARGON BUSTER:

ALSO NEW IN THE WORLD OF

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Top tech WHAT’S

What happened in Vegas

HOT

FROM WALKING CARS TO SMART EARBUDS TO WATERPROOF NOTEPADS, THIS YEAR’S CONSUMER ELECTRONICS SHOW GAVE US A GLIMPSE OF THE WEIRD AND WONDERFUL TECH THAT’S ON THE HORIZON

t’s billed as the Consumer Electronics Show, but much of what’s on offer at CES is also of great interest to the business world. So in case you didn’t make it to Las Vegas this year, here’s what you missed. Bots, voice assistants, VR, AR, robots and other artificial intelligence (AI) applications were all out in full force at the show. Less predictably, one of the biggest headline grabbers was Hyundai’s walking car, a vehicle that can grow legs to clamber over rough terrain. The Hyundai Elevate is being pitched mainly at NGOs working in disaster zones and is unlikely to figure as a company car any time soon. It can climb a 1.5m wall, but only moves at a snail-like 3mph – so not the vehicle to get you to the airport in a hurry. Bendy screens of various kinds were a distinct theme this year. Probably the most eye-catching exhibit was LG’s giant organic LED (OLED) Falls installation, featuring 260 individual digital screens in an undulating array, including 76 concave, 72 convex and 112 flat 55-inch screens. In total, Falls is 6m x 20m in size and was used to display desert, waterfall, ocean and light scenes.

ROLL-UP SCREENS On a much smaller level, businesses may well be interested in LG’s roll-up version of the same technology, the OLED TV R, which would be a handy means to hide away the screen in the boardroom. This will be for sale on the US market in 2019. Prices haven’t been announced yet, but commentators are speculating it will be in the $10,000-plus range – so it’s unlikely to appear in that budget hotel room any time soon. Going smaller still, Royole showed off the world’s first flexible phone, the FlexPai. This device fits in your pocket like a phone, but folds out to become a tablet. You can flip the screen view in any direction, but it’s only available in a developer model at the moment, so pricing is unknown. At the affordable end of the price scale, if you’re worried about dropping your notes in the hotel pool, the Nuka notepad and smart pencil – developed by a Ukrainian start-up of the same

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name – is so waterproof it can be used underwater, and will set you back just $60. You can use the Nuka notepad again and again, giving new meaning to ‘recycled stationery’. And for road warriors, a glimpse into the future was the next generation satnav developed by UK company Envisics, which beams your dashboard information onto the windscreen in front of you, like a hologram. The system shows your speed and distance to destination and place labels, highlights hazards in front of you, and can even show you where to park. Also catching attention in the automobile technology realm was Qualcomm’s C-V2X technology (cellular vehicle-to-everything, since you ask) which can do many things. Using 5G mobile, it will enable cars to talk to other cars, cyclists and pedestrians, potentially making driving much safer. For now, one of the key applications is telling your car when traffic lights are about to change.

MUSIC TO YOUR EARS If you thought a microphone was just a microphone, it’s time to get up to speed. Sennheiser’s Ambeo microphone – for Apple devices – is described as a smart headset, featuring dual microphones and a set of headphones. Most important, it features binaural recording, in which ‘your ears and brain work together to create a 3D audio landscape of your surroundings’, creating a sound eerily close to what you hear naturally. £259.99; en-uk. sennheiser.com

TRANSLATION AND RELAXATION Another application of interest to business is real-time translation. Among the key products on show, Waverly Labs demonstrated its Pilot smart earbuds, which enable you to translate 15 languages and 42 dialects, stream music and make voice calls. Google was showing off the Google Assistant interpreter mode, which enables real-time translation of conversations. And iFlytek showed its portable live translation and voice-to-text devices, with translation for 63 languages. Finally, if work is making you stressed, CES had something for that too. Doppel, a UK-based watch company, showed a pulsating wrist system that can calm users in real time. “Doppel works by creating a silent vibration on the inside of the wrist, which feels like a heartbeat,” explained brand representatives. Finally, Umay’s Rest, a thermal meditation mask for managing anxiety and stress, gained an innovation award. It uses a combination of heat and pulsation to guide users in meditation, and allow them to relax from excessive screen time.

PARK AND FIND Forgotten where you parked? Try Vodafone’s V-Auto, a handy tracking device that plugs into a socket under your dashboard and works with the Vodafone cellular network. It can also track journey times and tell you you’re driving safely. £85, plus £4 monthly subscription; shop.v.vodafone. com/UK/V-Auto

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Directory To advertise in the directory in print or online contact Carl Methven on + 44 (0)1534 615886 or carl.methven@blglobal.co.uk

Great learning boosts performance It’s a simple fact of business that people who know how to use their IT systems properly are more productive and happier at work. At ALX Training, it is our mission to ensure that every person we work with can use their essential applications properly, saving time, smoothing processes and creating a more productive workplace.

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 Hong Kong and Shanghai. We are also the only firm to have offices in all three British Crown Dependencies. Our services include:

Ashburton Investments is an investment manager offering discretionary portfolio, multi-asset and specialist fund solutions to international private and corporate clients including family offices, trustees and wealth managers. While the rest of the industry may have had to come to terms with how the global financial crisis changed the world for their clients, we have simply carried on doing what we have always done – delivering risk adjusted returns through all market conditions.

Our trainers are renowned for their product knowledge, and their friendly and energetic attitudes to training help them get the best from every person they teach.

l Corporate l Dispute Resolution l Private Client & Trusts l Property

Learning starts at induction We are well-known for our range of Microsoft Office courses which includes Office 365, Excel, Outlook, PowerPoint, Word, Project, SharePoint and Visio but our clients know we can do much more.

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.

Not only do we train on well-known accounting packages such a Xero and QuickBooks but we create courses on bespoke in-house systems. We design unique courses specifically for your organisation, so that your staff learn precisely the information they need to work efficiently and effectively.

For more information visit our website www.applebyglobal.com

Multi Asset is not the latest investment trend to us. It has been the cornerstone of our business since inception, supported by our experienced and longstanding equity specialists. For more than 35 years, we have invested in what makes sense. Our product set and approach to investments has evolved over time to suit ever changing market conditions but the underlying constant is that we understand our clients need to effectively manage risk and we put them at the centre of our thinking.

Wendy Benjamin Managing Partner, Jersey Group Partner, Guernsey wbenjamin@applebyglobal.com

Globally, Ashburton Investments has over £9.1bn under management as at April 2018 with offices in the Channel Islands, United Kingdom and South Africa.

We know there’s no better place for your new colleagues to start learning than during their induction programme, so we develop bespoke induction courses that give your new starters all the information they need to hit the ground running. We can even deliver content online, so training can be ongoing and continuous.

Contact Laythamm Malorey E: laythamm.malorey@ashburton.com T: +44 (0)1534 512010 www.ashburtoninvestments.com

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Independent and Professional We offer a full range of management and fiduciary services to our domestic and international private clients and corporate structure: Family office - bespoke assurance l Wealth management - your strategy l Trustee - impartiality with vision l Corporate services - attention to detail l Good governance - a helpful eye l Strategic guidance - controlled ideas l

We aim to assist in the provision of personal service to meet your requirements. Ask us. Being vigilant and proactive in the face of a fast changing legal, economic and fiscal landscape. We can provide the focus to your solution. Try us. Our team has many years of experience dealing with a wide range of clients in different countries. We look to provide good corporate governance to achieve your aim. Contact us: Wendy Warder – Senior Trust Manager wwarder@baccata.co.je Lisette Le Creurer – Senior Trust Manager llecreurer@baccata.co.je Justin Clapham – Client Director jclapham@baccata.co.je Áine O’Reilly – Client Director aoreilly@baccata.co.je Tim Cartwright – Consultant tcartwright@baccata.co.je www.baccata.co.je Tel: 00 44 1534 870670 Regulated by the Jersey Financial Services Commission

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Be Secure is a consultancy business providing services in the following areas; GDPR data protection ISO 27001 Information Security l Cyber Security l EU Representative services l l

(via Irish office)

Be Secure, in association with partners who are experienced professionals in data protection, technology, cyber security and legal services are working to deliver high standard assurance and advisory services to Channel Islands organisations. We work as a business partner to your organisation in support of the board of directors, trustees, partners, senior management and staff in managing the governance obligations of data protection in this new GDPR data protection world! Be Secure is lead by a highly experienced finance professional, who has worked in senior roles in private equity owned businesses, in both commercial and financial services business sectors. As a member of the International Association of Privacy Professionals (“iapp”) and an accredited Certified Information Privacy Professional Europe (CIPP/E), Certified Information Privacy Manager (CIPM), Certified Information Privacy Technologist (CIPT), GDPR Practitioner, ISO 27001 Lead Implementer and Lead Auditor, Be Secure’s founder and director can help you, and your colleagues, manage this area in a professional and practical way for your organisation and clients. For further information please contact:

Carey Olsen is a leading offshore law firm. We advise on Bermuda, British Virgin Islands, Cayman Islands, Guernsey and Jersey law across a global network of nine international offices. We are a full service law firm working across banking and finance, corporate and M&A, investment funds and private equity, trusts and private wealth, dispute resolution, insolvency and property law. Our clients include global financial institutions, investment funds, private equity houses, multinational corporations, public organisations, sovereign wealth funds, high net worth individuals, family offices, directors, trustees and private clients. We work alongside all of the major onshore law firms, accountancy firms and insolvency practitioners on corporate transactions and matters involving our jurisdictions. Our advice is delivered by an approachable and experienced team of globally-minded lawyers who work in partnership with our clients to help them achieve their objectives. We have the expertise and resources to handle the most complex international transactions combined with a personal approach to business. Contact: guernsey@careyolsen.com T +44 (0)1481 727272 jerseyco@careyolsen.com T +44 (0)1534 888900 www.careyolsen.com

Brian Siney, Founder and Director, CIPP/E, CIPM, CIPT, ISO 27K Lead Implementer, Lead Auditor, FCA brian@besecure-consultants.com +44 7797 738743 or www.besecure-consultants.com

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