BL Magazine Issue 66 February/March 2020

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• the year ahead • offshore structures • family offices • china • japanisation


digital directors Staying ahead of technology’s risks and opportunities


With a network of offices spanning the world’s leading financial centres, we deliver a seamless service across the full spectrum of offshore law. Our global reach is underpinned by extensive experience in our jurisdictions and by long-standing connections with industry bodies and other professional advisers.


With you wherever your business takes you O FFSH OR E L AW S PEC I A LI ST S B ER MU DA CA PE TOW N







Reasons to be cheerful Christmas seems a long time ago now but, wow, what a run-up to Christmas that was! After three years of political wrangling that culminated in a decisive general election victory for the Conservatives, by the time you read this the UK will finally have left the European Union (EU). Regardless of which side of the leave-remain debate people may fall, it is a momentous geopolitical development. Now, the race is on to negotiate a UK-EU trade deal by the end of the year. Jersey’s and Guernsey’s third-country status in relation to the EU has always meant that the jurisdictions have been interested onlookers when it comes to Brexit. However, their close alignment to the City of London means any poor outcomes for the Square Mile during those negotiations will have implications for them. EVENTS TO WATCH There are other geopolitical events to be mindful of in the months to come. US-China trade tensions are on pause after the two countries signed an initial trade deal in the new year. However, President Trump has hinted at trade tariffs targeted at the UK and EU over plans to charge US tech companies a digital tax for profits made in those markets. As Jersey Finance CEO Joe Moynihan tells us in our piece on what lies in store for Channel Islands businesses in 2020 (page 26), a hit to global trade will reduce capital flows and curtail private wealth, which will also hit the islands’ financial services sectors. On the regulation front, 2020 will see the first tax filings under the new substance regime. All eyes will be on how tax authorities are going to interpret the legislation in this first year. Will they insist on complete compliance or be more lenient as businesses get used to the new regime? The early years of this new decade will also see a push for transparency in offshore structures via the EU’s Fifth Anti-Money Laundering Directive. Its conflict with the EU’s own privacy laws is a big concern for financial services businesses in Jersey and Guernsey (page 36). They fear the directive will make clients vulnerable to overzealous media and criminal elements. St Helier and St Peter Port will follow Brussels closely to see how it irons out this conflict before implementing the directive at home. NOT ALL BAD NEWS While it feels like there is much to keep a watching brief on this year, there are also plenty of reasons for the islands to be cheerful.

According to AfrAsia Bank’s Africa Wealth Report 2019, 42% of the continent’s $2.2trn of wealth is controlled by high-networth individuals. In search of stability, this demographic has a 75% propensity to keep funds offshore, Henry Baye, the new CEO of Standard Chartered Jersey, tells us in this issue’s big interview (page 18). The need for Africa and the opportunity for Jersey is big, he adds. And China’s government has kicked off 2020 with changes that Linklaters predicts will herald a new era for international investment in China, potentially reaching $1.5trn in the next 10 years. China’s wooing of international investors spells good news for Jersey and Guernsey. The islands’ depth of governance expertise, robust legal frameworks and innovative structures are what investors interested in China are looking for, experts tell us (page 42). AND FINALLY… This is my last issue as Editor-in-Chief of Businesslife. It has been a tremendous pleasure to edit your magazine and to work with Carl Methven, Angela Lyons and Kate Wheal – the extremely talented team at BL. I’ve enjoyed meeting and getting to know many of you and have been consistently impressed by the passion and pride with which you champion the Channel Islands. I’m delighted to be handing over the reins to Jon Watkins, who brings some fantastic experience to BL. As a financial journalist of nearly 20 years, Jon has covered and worked with some of the world’s leading financial services brands. I’m sure you’ll enjoy getting to know him yourself over the coming months but, as a starter, we sat down with Jon to find out more about his vision for Businesslife. I hope you enjoy our interview with him (page 6), and the rest of this issue. Wishing you all every success for the future. n

i’ve been impressed by the passion and pride with which you champion the Channel Islands

Eila Madden is Editor-in-Chief of Businesslife

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PERFORMING FOR GENERATIONS For over 240 years, we’ve helped people to invest for their future. Today, clients with £200,000 or more to invest enjoy cost-effective access to our extensive expertise and their very own Investment Manager. It’s why we’re kept in the family for generations. Find out more about investing with us by contacting our Jersey Office on 01534 506070 or visit

Investors should remember that the value of investments, and the income from them, can go down as well as up and that past performance is no guarantee of future returns. You may not recover what you invest. Quilter Cheviot and Quilter Cheviot Investment Management are trading names of Quilter Cheviot Limited. Quilter Cheviot Limited is registered in England with number 01923571, registered office at One Kingsway, London WC2B 6AN. Quilter Cheviot Limited is a member of the London Stock Exchange, authorised and regulated by the UK Financial Conduct Authority. Quilter Cheviot Limited is regulated under the Financial Services (Jersey) Law 1998 by the Jersey Financial Services Commission for the conduct of investment business and funds services business in Jersey and by the Guernsey Financial Services Commission under the Protection of Investors (Bailiwick of Guernsey) Law 1987 to carry on investment business in the Bailiwick of Guernsey, and by the Financial Sector Conduct Authority in South Africa for the provision of intermediary services. Quilter Cheviot Limited has established a branch in the Dubai International Financial Centre with number 2084 which is regulated by the Dubai Financial Services Authority. Accordingly, in some respects the regulatory system that applies will be different from that of the United Kingdom.

4 xxxx/xxxx 2019



26 60 9 comment


Channel Islands’ position as a global financial services centre, and embracing digital transformation


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

42 6 Meet the new editor New BL editor Jon Watkins on his plans for the publication


8 News

risks, opportunities and challenges facing them in the year ahead

30 Japanisation

The latest Channel Islands business news

The global spread of Japan’s two-decade-old zero interest policy

10 Appointments

36 transparency

Recent people moves in Jersey and Guernsey

Solving the transparency dilemma of offshore structures

18 Interview Henry Baye, CEO of Standard Chartered’s Jersey operation, on digital innovation and growth in new markets

26 Future view Business leaders share their views on the

42 China in focus Why international investors are ramping up their exposure to the world’s biggest market

48 digital directors A spate of high-profile data breaches highlights the need for more digital-savvy boards

56 family offices Secretive family offices face some very particular governance risks

60 visual shift Could augmented and virtual reality technologies really alter the way your business operates?

12 Regulation watch Personal accountability, and the Capacity Law

64 Training


How artificial intelligence is changing businesses’ approach to recruiting and training staff

Building teams, top tips for making it to the top, the rise of the emoji, plus more

The knowledge

82 20 questions Vistra Jersey’s Simon Morgan on meeting famous people and influencing Open All Hours

contributors The BL Global Discussion Forum


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.

As China shifts from a manufacturing powerhouse to a consumer-driven innovator, Amy explores how international investors are ramping up their exposure to the world’s biggest market.


When Japan adopted a zero interest policy two decades ago, it seemed an anomaly. But, as Phil explains, the symptoms of low inflation, low growth and low interest rates are spreading around the world.


Moving into the issue of the tech revolution, Christopher takes a look at whether businesses could benefit from dayto-day take-up of augmented and virtual technologies.


Meanwhile, Chris sets out that, while a greater push for transparency in offshore structures is a good thing for blueribbon jurisdictions such as Jersey and Guernsey, privacy laws still need to be ironed out.

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Words: Eila Madden Photos: Laura Martinez Da Silva Tell us a little about your background and how you got to where you are now. I’ve been a financial journalist for nearly two decades now, working on some fantastic publications with incredibly talented journalists, and for some amazing financial brands. In the early days of my career I wrote a lot for retail financial services, but as my career developed I moved much more towards the investment and funds spaces. Having started out very much as a print journalist working on and editing magazines, through my work in various London media agencies, I have also helped a range of major financial institutions and investment firms to engage with their audiences. What appealed to you about taking on the editorship of BL? Two things: the quality of the publication and the exciting Channel Islands financial landscape. Having written for BL for some time now, I’m well aware of the quality of the publication – engaging high-profile individuals and addressing some of the most topical and exciting issues facing the sector. The Channel Islands funds space is really interesting right now – with organisations keen to exploit opportunities and to continue to expand. Those elements make this a really exciting proposition.

I’d love to see us delivering more events – be it breakfast briefings, roundtable discussions, editor’s lunches or full-on conferences

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Have you had any previous connections with the Channel Islands? As I mentioned, I’ve been writing for BL for some years now and know [previous editors] Nick and Eila really well. So that’s given me an insight. But some of my other projects and previous roles have also seen me visit and write about the Channel Islands – in fact, I was there just a few weeks ago interviewing the CEO of a major wealth management firm for a video piece. So I know the Channel Islands pretty well, but look forward to spending more time there in the coming months. It’s obviously early days, but what’s your vision for the magazine and how it serves its readers? I think the magazine is great at profiling key members of our audience and tackling the major developing issues of the day. So I hope to continue that great work. One area I’d love to see us develop, however, is in delivering more physical events under the magazine’s brand. Whether it’s breakfast briefings, roundtable discussions, editor’s lunches or full-on conferences, I think our audience enjoys the opportunity to network and I also believe that physical events are a great way to tackle an emerging topic. So I hope we can run more of those.

You’ve had, and continue to have, a very successful career within London’s agency sector. How will you use that experience to enhance and evolve BL? I think one of the things you learn from being in fast-paced agencies is to be nimble and flexible. One of my biggest bugbears is the phrase ‘because that’s the way we’ve always done it…’ I think it’s important to continually evolve and to be accommodating to the situation that’s in front of you. That will allow us to explore new ideas, new ways of delivering content in an engaging way and new ways of interacting with our audience. I hope bringing that attitude along with me will mean we continue to evolve and adapt, and keep on offering something that appeals to our audience. Can readers expect to see some early changes once you take over? I don’t think we will introduce any major changes at this stage – but, as I say, I’m keen to be flexible and am open to new ideas. Obviously, the fantastic work both Eila and Nick have done over the years has put the publication in a strong position. My role now is to come in, spend some time with it, and tweak anything I think can make it even better. You’ve spent quite a significant part of your career in the world of digital media – what’s made you come back to print? I’ve never really left print, to be honest. I have continued to have some involvement with print products at every stage of my career – from editing the Institute of Financial Services’ magazine, Financial World, when I was first starting out, to overseeing the Institute of Directors’ member title as Business Director at a major London agency until recently. There is no doubt I am a major advocate of print – in fact, I spoke at the World Print Forum event in Berlin recently on exactly that topic, setting out why I think print continues to thrive in the digital world. For me, it’s about tactility and the reader experience. At a time when we are bombarded with digital messaging at every stage of our day, even when we’re asleep, the opportunity to pick up something physical and to immerse yourself in the


Meet the

Editor jon watkins content at your own pace and on your own terms is really enduring. In addition, there is no doubt that print continues to have an authority and reputation that the digital world sometimes doesn’t. So I’m about as big an advocate of quality print as you’ll find – and the good news for me is that print has found a position in the multi-platform world that allows it to continue to thrive. It’s not print or digital; it’s print and digital. Digital media has, of course, created huge demands on readers’ time and attention. How can a magazine like BL cut through in that competitive environment? It’s all about quality and authority. As well as those demands you mention, we are of course living through the era of ‘fake news’ and distortion of facts. That means audiences are becoming increasingly loyal to publications they trust and which are professional, fact-checked and

authoritative. BL is a great example of that. I also think it’s important to be as relevant to our audience as we can be. We cover quite a niche area and, although we look at global issues and global trends, our core audience is concentrated in one area. So we can be very relevant and very focused on making sure we deliver something specifically for them. Finally, I like a publication to deliver something our audiences can’t get – or at least find it hard to get – elsewhere. For us, we have great access to the high-profile individuals leading the space we cover. So we can deliver unrivalled insight there, which our audience will struggle to get from other publications.

BL is going to be part of a portfolio of projects for you. What else is going to be keeping you busy? I have a couple of other hats. I do some consulting in the agency space, helping

agencies pitch for new clients and advising them on how to deliver content in a more effective and more efficient way. I also have a couple of private clients for whom I deliver content – which keeps me busy, but also helps fuel my interest in other sectors and other markets. When you do find a spare moment, how do you like to relax? Well, all of that keeps me pretty busy. But outside of the office, I’m a big football fan, watching Arsenal on a regular basis – although that’s been far from relaxing lately. I also recently rediscovered fishing and its value as a fantastically relaxing pastime. As a child, I was taken fishing a lot by my father and never really understood the attraction. But now that I have a busy working life and three young children of my own, I fully understand the appeal of time on the riverbank. n

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in the NEWS Follow us @blglobalnews

INTERTRUST REPORTS ON MIDDLE EASTERN WEALTH TRENDS Wealthy Middle Eastern families are adopting a more global mindset, leading to the increased adoption of family offices and special-purpose vehicles, according to Intertrust. And Jersey is the most favoured jurisdiction among families seeking wealth management and succession solutions in the next five years. In its report, Bridging the generation gap: Wealth Trends in the Middle East, Intertrust surveyed advisers serving clients in the UAE, Saudi Arabia, Qatar, Oman, Kuwait and Bahrain. Some 74% of advisers expected high-net-worth families to become more global over the next five years, with a growing demand for legacy plans to be based on international best practice (58%), and a greater awareness of governance and regulation (58%). The study found concerns over political stability were a key motivation for structuring outside the region (83%), ahead of the popularity of overseas education (57%) and access to global tech-enabled financial solutions (53%). Family offices are predicted to be the fastest growing wealth structuring vehicle among Middle Eastern wealthy families, with special-purpose vehicles and corporate structures second and third respectively, said the report.

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JT DOUBLES BROADBAND SPEEDS JT increased minimum broadband speeds from 250 Mbit/s to 500 Mbit/s for all subscribers in January. Lyndon Farnham (pictured), Jersey’s Minister for Economic Development, Tourism, Sport and Culture, and Deputy Chief Minister, commented: “This reflects well on Jersey as we enter a new decade very much on the front foot in this sector. It places us well ahead of most places in the world for high-speed connectivity.” Last year, Jersey was recognised as the first jurisdiction in the world to make full fibre available to every broadband user, and the third fastest country/territory in terms of broadband speeds. S&P UPGRADES OUTLOOK FOR ISLANDS Rating agency Standard & Poor’s has affirmed Guernsey’s long- and short-term sovereign credit rating at AA-/A-1+. Its assessment of the island’s outlook has also improved from negative to stable in light of the greater stability in UK politics and more clarity on the UK’s exit from the EU. Meanwhile, Jersey’s credit rating has been reviewed and while the long- and shortterm sovereign credit ratings have been maintained at AA-, the outlook has also been revised from negative to stable.

Done Deals Ogier has represented Intu Properties on its £40m sale of Sprucefield Retail Park in Northern Ireland to investment trust NewRiver. The Ogier team advising on the Jersey aspects of the deal included Partner Raulin Amy and Managing Associate Marie-Claire Fudge. Bedell Cristin has advised London-based energy technology company Arq on its fundraise of more than $60m from shareholders. The Bedell Cristin team who provided Jersey law advice was led by Partner Guy Westmacott and Associate Natasha Bairstow. Walkers has advised ING, lender to aluminium producer Rusal, on the Jersey law aspects of a $1bn five-year pre-export finance facility. The Walkers team included Partner Nigel Weston, Senior Counsel Jon Le Rossignol and Associate Ellen Jarvis.

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MERGERS AND ACQUISITIONS Crestbridge has announced a joint venture with US-based financial services specialist Willow Street, which has provided trustee and fiduciary support to families and their advisers for more than 15 years. The joint venture will be led on Crestbridge’s side by Family Office Group Heads Heather Tibbo and Paul Hunter, and by Phillip Harrington, CEO of Willow Street. Consultancy Duff & Phelps is to be acquired by a global investor consortium led by funds managed by Stone Point Capital and Further Global for $4.2bn. The equity sellers include the Permira funds, which will continue to hold a significant stake in the company as part of the consortium. The Duff & Phelps management team will maintain a meaningful equity stake in the firm and continue to lead it. The transaction is subject to customary closing conditions and is expected to complete in the second quarter. Channel Islands retailer SandpiperCI has exchanged contracts to buy the entire share capital of The Guernsey Pub Company, the holding company of Guernsey brewery Randalls. Completion was expected by the end of February. No redundancies are expected as a result of Sandpiper’s acquisition. Calligo has acquired Dublin-based IT managed services provider DC Networks. DC Networks will be rebranded as Calligo and its senior managers and team integrated into the Jersey-based data optimisation business. This is Calligo’s sixth acquisition in the past three years. Zedra has acquired BNP Paribas Singapore Trust Corporation, subject to regulatory approval. The Singapore trust business serves the Asian ultrahigh-net-worth and high-net-worth markets. BNP Paribas Wealth Management will work with Zedra as a preferred partner for trust services. The acquisition follows confirmation in January of private equity specialist Corsair Capital taking a majority stake in Zedra. The deal, announced in November 2018, has gained full regulatory approval. Bart Deconinck, who co-founded Zedra four years ago, has become Group Executive Chairman.

Competing on a global stage: the challenge ahead for Jersey and Guernsey capital, the business environment, infrastructure or reputation, the ranking of the Channel Islands centres is outstripped by other centres.


MIKE WARDLE Head of Indices, Z/Yen Group

As international competition increases, the Channel Islands need to make more of their unique position in relation to mainstream Europe and the UK if they are to arrest their decline in the Global Financial Centres Index


ince 2007, Z/Yen has produced the influential Global Financial Centres Index (GFCI). From its first publication, the index has tracked the development of financial centres by statistically combining quantitative data with the qualitative views of finance professionals across the world. In each edition, we take account of more than 30,000 assessments of financial centres and have at least 3,500 people providing their views. In recent years, the rankings of Jersey and Guernsey have had mixed fortunes. From a 16th edition low in September 2014, the islands moved up the rankings. But from 2017 they have fallen significantly to 59th (Jersey) and 92nd (Guernsey) out of the 104 centres now measured by the index. So what is affecting the islands’ standing as financial centres competing against the rest of the world? Competition grows First, it is competition. As emerging markets have grown, so new financial centres have come to the fore, whether in China and the rest of Asia Pacific, the Middle East or Eastern Europe. From initially tracking 60 centres, GFCI now tracks more than 100. The leading Asian centres have carved out a strong position in global financial services, with seven of the top 10 centres in the GFCI drawn from the region. And established economies, such as Canada, have continued to invest in and develop their financial markets. In turn, the average rating has dropped because newer centres tend to enter low. However, that only puts a spotlight on the Channel Islands’ recent poor performance. Diving into the quantitative data that drives financial centre performance, the Channel Islands hold their own in terms of financial sector development, reflecting the range of services and the strength of finance they promote. There is more, however, to building a financial centre than finance. Looking at the data on human

Size counts Part of this is due to size. The most successful financial centres have large clusters of financial services business (attracting others to join them to explore opportunities), support thriving cultural environments and have access to a large, highly skilled workforce to support firms in their cities. These cities have emphasised the development of their infrastructure, including the built environment, transport and technology. They have performed well and are seen as attractive places to work. Offshore centres are often not cities, but jurisdictions. A lot of recent focus has been on cities as clusters, but offshore centres are often not large enough to sustain clusters. Difference in size may explain why Guernsey has fallen significantly further in estimations, despite having a similar regulatory approach to Jersey. Turning to connectivity, the leading financial centres have strong and deep connections with a broad spread of other centres across all regions of the world, whereas the Channel Islands have strong connections with the UK and with a small number of financial centres in the rest of the world. This may be an area for deeper cooperation between Jersey and Guernsey. Increasingly, being connected to other centres is important in building strength as a financial centre. Being more tightly coupled to the UK means London’s slippage due to Brexit has added to Channel Islands challenges. Future challenges Turning to the future, the Channel Islands will find it difficult to compete with larger financial centres in many of these areas, simply because of the scale of operations in a smaller centre. This puts a deep emphasis on developing and promoting areas of specialism, continuing to be welcoming to business, and ensuring that regulatory approaches encourage innovation. Guernsey is to be commended for its efforts in green finance, showing up well in Z/Yen’s Global Green Finance Index. Being stricter in oversight and faster in correction when things go wrong will also be important. Building new relationships and connections with a wider range of overseas financial centres and businesses will be essential to ensuring long-term success. The task will be to look for the areas where business that connects different jurisdictions needs a home. The advantages of sitting outside mainstream Europe and the UK give the Channel Islands a unique position – they are connected to the major centres of Europe, but with a separate legal framework that allows for creative and innovative commercial arrangements beyond those related to tax. n To contribute to the GFCI questionnaire, go to

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Appointments Hatstone has appointed Bella Ward as Group Partner, based in Jersey. Bella specialises in banking, finance, corporate, commercial and real estate issues and has particular experience in leading crossborder transactions. She joins Hatstone from Walkers, where she has worked for the past three years. Prior to this, she was with Carey Olsen. An international career has also included spells with Allen & Overy in Frankfurt and London, White & Case in Moscow, Clifford Chance in Frankfurt and Moscow, and King & Wood Mallesons (formerly Mallesons Stephen Jacques) in Brisbane, Australia.

Jersey property investment group Le Masurier has appointed Mike Covell as Chairman. An experienced NED, Mike currently chairs UK financial planning business the Ascot Lloyd Group and investment advisory business Sackville Capital, and is Director of the Bank of Butterfield. Previously, he chaired the Tilney Group and Hawksford International and was a Director of the International Property Securities Exchange. Mike retired from Goldman Sachs in 2008, where he was an MD in its European Private Wealth Management Division. Prior to this, he was a Senior Partner at Rawlinson & Hunter.

Accountancy firm Grant Thornton has appointed Jason Lees-Baker as Audit Director based in Jersey. Jason brings to the firm more than 20 years’ experience providing audit and assurance services across financial services. His clients include banks, funds and fiduciary service businesses, and he has assisted regulated entities and the regulator in preparing management and regulatory reports. Jason joins from Mazars Channel Islands, where he has served for more than 12 years as a Partner. Prior to this, he was a Partner at MRI Moores Rowland, following almost four years with KPMG Jersey.

Carey Olsen has made three senior promotions in Jersey: Will Whitehead and Louise Woolrich (pictured) to Counsel and Arindam Madhuryya to Senior Associate. Will, who was sworn in as an Advocate in December, is a member of Carey Olsen’s property practice. He joined the firm in 2005 and specialises in commercial property transactions and regulatory matters. Louise, an experienced Advocate and trust litigator, joined Carey Olsen in 2011 and is a member of its dispute resolution and litigation team. Arindam joined the firm’s investment funds and corporate team in 2014, specialising in advising on investment funds matters.

TISE has named Charlie Geffen as Chairman of its regulatory arm, The International Stock Exchange Authority. Charlie will combine the new role with his existing business interests. Earlier in his career, he spent 32 years at law firm Ashurst, latterly as Senior Partner, which included a merger with an Australian law firm and growth across Europe, Asia and the US. He then joined Gibson, Dunn & Cutcher and, as Chair of its corporate practice in London, led the growth of its transactional practice there. Charlie has stepped back from Partner to Senior Adviser at Gibson, Dunn & Cutcher.

Oben has appointed Darren Boschat as a Consultant to its Jersey regulatory practice. Darren’s career includes more than 15 years at the Jersey Financial Services Commission advising on AML/CFT issues, financial sanctions, prudential reporting, corporate governance and risk and compliance frameworks. His supervisory background encompasses all regulated sectors, including banks, collective investment funds, investment and trust company businesses. More recently, he has helped design the JFSC’s supervisory risk model and supporting guidance.


Nick Ford has been appointed Managing Director of Moore Stephens Fiduciaries (Guernsey). Nick joined Moore Stephens as a Director in 2018, taking on responsibility for business development and the trust and corporate teams in Guernsey. He has broad experience dealing with high-net-worth families and complex structures across a range of jurisdictions. A Fellow Chartered Certified Accountant, he previously spent 19 years with Saffery Champness Registered Fiduciaries in Guernsey, gaining experience across trust and corporate services. The appointment follows the incorporation of the Guernsey partnership in July.

JTC has appointed Fiona Wild as Director, Head of Operations within its Institutional Client Services (ICS) division in Jersey. Fiona will be responsible for leading and creating operational efficiency within the ICS network of offices to support the delivery of the division’s business plan. A qualified chartered accountant, she has broad experience in all major alternative asset classes, including real estate, private equity, venture capital and renewable energy. She joins JTC from IQ-EQ, where she led the fund services division for Jersey. Her career has previously included six years as Director of Fund Accounting at State Street.

Jersey Finance has named Allan Wood as its new Global Head of Business Development. Allan has worked with Jersey Finance for the past five years and has been promoted from his previous role as Head of Business Development – Western Markets, in which he focused on the markets of the UK, North America and Africa (South Africa, Kenya and Nigeria). With more than 25 years’ experience in financial services, Allan joined Jersey Finance in 2015 from Barclays International in Jersey, where he served as Vice President – Head of International Clients. Prior to this, he spent 11 years with RBS.

Crestbridge has announced the promotion of Mark Collins to Director in the Fund Services business in Jersey. Mark has been with Crestbridge since 2017, previously as Senior Manager, then Associate Director. He has more than 12 years of financial services experience across wealth management, corporate banking and offshore administration. Prior to Crestbridge, he worked at Barclays in a variety of change, strategy and product development roles, including seven years with Barclays Corporate Banking. In his new role at Crestbridge, Mark will focus on the firm’s private equity funds clients.

Enhance Group has promoted its Head of Consultancy Dr Ruzhen Li to Head of Advisory. Dr Li has relocated from the firm’s London office to its Jersey HQ and will lead portfolio and consultancy advice services. She will manage a team of investment consultants, research analysts and support staff overseeing investment assets on behalf of fiduciary and family office clients. Dr Li’s career started with Deloitte Private Client Services in 2006. She co-led a management buyout of the investment consulting business, founding LJ Athene Investment Advisory, where she was Head of Research.

Canaccord Genuity Wealth Management in the UK & Europe has promoted Andy Finch to CEO of its International division, which includes CGWM businesses in Guernsey and Jersey. With more than 35 years’ experience in wealth management, Andy joined CGWM UK & Europe in 2002, having worked for Zurich Financial Services, Standard Life and Lloyds Banking Group. Most recently, he was Managing Director, CGWM UK & Europe Funds. Andy is also a Director of Irish UCITS umbrella fund CGIF, and a member of the International division’s executive committee. He takes up his new role in April.


Personal accountability – a ‘fine’ mess



Advisory Partner, KPMG Channel Islands

Advisory Manager, KPMG Channel Islands

It’s getting harder to be both reasonable and commercial as regulators strengthen their personal accountability regimes. Affected businesses need to come up with new strategies to cope and comply


egulators around the world are increasing their focus on personal accountability and Channel Islands regulators are no different. With this focus, the onus is on individuals to ensure they take all ‘reasonable steps’ to prevent regulatory breaches. However, demonstrating and evidencing these steps, in a time of ever-growing regulatory requirements, is not straightforward. Do you worry about your firm’s compliance and corporate governance? Does the concept of personal accountability keep you awake at night? You are not alone. The introduction of the Senior Managers and Certification Regime in the UK requires regulated firms to identify senior managers, allocate responsibilities and ensure those appointed are fit and proper for their roles and meet conduct rules. The concept is gradually spreading globally, as other jurisdictions introduce measures to reinforce personal accountability and, consequently, personal liability. Fine facts and reputational risk Despite varying levels of sophistication in the regulatory regimes around the world, the global pressures on increased personal accountability are likely to continue to escalate the use of financial penalties and disciplinary sanctions. Consider the Channel Islands: recent years have seen the widening of the Jersey civil penalties regime, which grants the Jersey Financial Services Commission (JFSC) powers to impose civil penalties to any ‘principle person’ and, in Guernsey, increases to the discretionary financial penalties were made available to the Guernsey Financial Services Commission (GFSC). Individuals are now more likely to be fined or face sanctions unless they can show ‘reasonable steps’ were taken to prevent wrongdoing. In July 2019, the JFSC issued its first civil penalty against a regulated entity, a fine of £381,010. Also in 2019, the GFSC published the

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highest number of public statements detailing fines on individuals in the past three years. Public statements in 2019 contained seven individual fines, averaging £10,000 per person, compared with only one individual fine in 2018 and three individual fines in 2017, respectively. The Council of Europe’s monitoring body, Moneyval, assesses compliance with international standards to counter money laundering and the financing of terrorism. With Moneyval visits to the Channel Islands on the horizon for 2021/22, we anticipate the trend towards fines will continue as the JFSC and GFSC evidence the effectiveness of their respective financial penalty regimes. Although such significant penalties can threaten you financially, the consequences of being found personally liable can be much more damaging. The public nature of fines and sanctions means a reputation built up over decades can be destroyed by one incident. Reasonableness vs commerciality In the face of these mounting requirements, it is becoming increasingly tough to comply with regulatory demands in a commercial manner solely using traditional approaches. We have been working with local regulated clients to assist with strategies to help balance reasonableness with commerciality: ● The enhanced use of technology can help increase your coverage and improve accuracy, helping you mitigate regulatory risk. Using digital tools to automate rule-based and repetitive requirements can free up your time, and that of your team, to focus on the matters requiring greater diligence and analysis. ● Keep challenging your decision-making and ensure you document the desired approach and thought processes in case you need to demonstrate these to a regulator. There is no panacea solution for regulatory compliance, but adopting a dynamic and fluid approach is key to staying on top of the tidal wave of regulatory change and ensuring you can evidence ‘reasonable steps’. n KPMG Channel Islands Associate Director Alexandra Reip contributed to this article.

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

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 JERSEY +44 (0)1534 843333 or e-mail

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

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 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, 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.


The Capacity Law – a first year in the Royal Court

DONNA WITHERS Head of Probate and Wills, Bedell Cristin

In an exciting first year, the Royal Court’s examination of this developing area of law has been useful for international estate planning and reassuring to practitioners


he Capacity and Self-Determination (Jersey) Law 2016 had its first birthday recently and it has already been examined in several cases before the Royal Court. The following is a summary of the themes emerging from this body of case law in its infancy. Best interests checklist An overarching principle of the Capacity Law provides that any decision made on behalf of an incapacitated person must be made in their best interests, which is then set out in a checklist of factors. The Royal Court confirmed that best interests is not what the client would decide if restored to capacity, referred to as ‘substituted judgment’. Although a best interests decision and a substituted judgment decision may have similar outcomes, it is not inevitable. The balancing of factors is at the heart of best interests decision-making. There may be more factors that may support a particular outcome, but that is not necessarily conclusive as there may be one factor of magnetic importance which is decisive. International estate planning: gifts The Royal Court was asked to authorise gifts to the value of £47.9m out of the personal estate of an incapacitated individual resident outside the island1. Jurisdiction was considered, as there

were other possible jurisdictions in which the matter could have been heard. It was noted that there can be practical difficulties in obtaining a legal representative, such as a delegate or curator, for an incapacitated client in the country of residence, as many places do not have an equivalent of the Capacity Law. The Royal Court decided that it was able to rule on the matter, notwithstanding that the client was resident elsewhere, as the assets were in Jersey. Further, it confirmed that an English Lasting Power of Attorney can take effect as if it were a Jersey Lasting Power of Attorney subject to the Capacity Law, if it has been registered in the Royal Court. Estate planning: wills There have been two cases concerning wills. The first was an application for authority to execute a will on behalf of an incapacitated client 2. Given the similarities of the Capacity Law and the English Mental Capacity Act 2005, the Royal Court considered the decisions and approach of the English Courts and quoted extensively from cases decided there. In the second case, the Royal Court expounded the customary law rule that an incapacitated person could make a will during a lucid interval. It decided that this rule was consistent with and subsumed within the Capacity Law. Personal injuries compensation and momentous decisions There have been two cases seeking the Royal Court’s blessing of a decision to accept an offer of an award of personal injuries compensation3. Under the repealed curatorship regime, approval of the Royal Court had been mandatory. Notwithstanding that Royal Court approval is no longer a requirement under the Capacity Law, nevertheless it gave its blessing on the basis that it was a momentous decision. It considered that its function was analogous to its role when a trustee seeks the Royal Court’s blessing. n

8 October 2019, re A and the Capacity and Self-Determination (Jersey) Law 2016 [2019] JRC 200 10 January 2019, in the matter of P and in the matter of the Capacity and Self-Determination (Jersey) Law 2016 [2019] JRC 002 3 5 December 2018, in the matter of the representation of A as Delegate (formerly Curator) for B and in the matter of an application pursuant to article 24 of the Capacity and Self-Determination (Jersey) Law 2016 [2018]JRC225; and 2 September 2019, in the matter of the representation of Dionne Gilbert as Delegate of P [2019] JRC 169A 1 2

14 February/March 2020

Local legal services

Local businesses are the engine room of the Channel Islands’ economy. With nine offices around the globe and a diverse practice, we’re known for our work with international organisations. But our heart is in the Channel Islands and we’ve never taken our focus away from the local market.

Local legal services in Jersey and Guernsey Business and commercial law Competition law Dispute resolution Employment law Offshore relocations Planning and environmental law Private wealth and family office Property and construction law Regulatory law Trusts Advisory Group Wills, probate and estate planning

Why digital banking should be a strategic priority


BEN SYKES Head of Global Liquidity and Cash Management, Commercial Banking, HSBC Channel Islands and Isle of Man

Digital transformation is no longer a ‘nice to have’ for the Channel Islands’ financial services community – it’s a prerequisite for earning a place in the global financial ecosystem


ith geopolitical uncertainty growing in Europe, across the Atlantic and in Asia, it has never been more important for international finance centres such as the Channel Islands to demonstrate their ability to adapt and to highlight their positive role in mitigating disruption within the global financial ecosystem. Guernsey and Jersey have excellent track records in enabling internationally mobile businesses to trade and invest across borders, thanks to their strong regulatory and legal frameworks, good structures and wealth of experience. Digital innovation is frequently cited as a key factor in helping firms on the islands to maintain their leading position. But digital is not just an enabler to help them do things better; looking at digital as a strategic priority is absolutely fundamental if the islands want to continue to be seen as relevant centres providing real value to international businesses. While the islands have invested in their digital infrastructure, and firms are continuing to roll out platforms to support their day-to-day activities, progress in terms of how they fundamentally manage their payments and cash flow has been in the context of their requirements today. Businesses must now be looking to the future, however, and considering what needs to be in place if they are to adapt. The benefits of digital solutions Managing cash digitally reduces complexity, improves visibility and enables immediate transfers. The quicker that businesses are able to move large funds, the better the returns possible. The digitisation of cash flow also offers

16 February/March 2020

businesses greater transparency of their overall cash position, helping firms to make decisions proactively and more accurately, based on realtime high-quality data. As distributed ledger technology becomes increasingly mainstream too, digital tools, integrated well, will enable businesses to embrace the benefits it offers. There are also security benefits – digital payments are more traceable than cash, and biometrics that provide secure authentication are becoming increasingly sophisticated. Combined, this all means that a digital approach offers the potential for better productivity, with artificial intelligence removing the need for humans to carry out process-driven tasks, freeing up their time to focus on strategic thinking. How to make the digital transition It’s not just a case of tinkering around the edges – it involves a root and branch review of how a business does its banking. It is telling that, according to HSBC’s Navigator survey, for businesses in Europe anticipating growth, the top internal contributor to their positive outlook is investment in technology (30%), while transformative technology in their sector (25%) is the second most important external factor. In addition, in terms of supply chain evolution over the next three years, increasing the use of digital and technology is the top change that businesses are planning to make, on a par with entering new markets (both 26%). Of course, change is always difficult, but businesses are clearly waking up to the idea that the benefits of doing so are long term – and that the risks of not doing so are serious. A key question for businesses today, for example, is whether they need as many ‘traditional’ bank accounts or whether they should explore ‘virtual accounts’, which are more flexible and can be partitioned for different purposes, currencies and users. Ultimately, the movement is towards a more modular and bespoke approach, where application programming interfaces can be integrated into a firm’s infrastructure to suit its needs – and those of its clients and suppliers. That sort of thinking might seem revolutionary for businesses, but other regions are already adopting this mindset. On a positive note, there are signs that businesses on the islands are looking to embrace this approach. And for those firms, we are launching virtual accounts here – although there’s clearly some way to go. Over decades, Guernsey and Jersey have established themselves as facilitators of trade and investment. However, with uncertainty in global markets set to persist well into this year, globally active firms will be asking increasingly how they can trade across borders efficiently and securely to meet their growth objectives. If Channel Islands firms want to continue to be part of the global financial ecosystem, a fundamental rethink of how digital can transform their business needs to be a priority. n



The Channel Islands Funds Forum

Time to take stock

Thursday 19 March 2020 The Royal Yacht, Jersey

9am to 3pm , 5 hours CPD available Delegate rate £245 until 28 February

Supported by:

Places can be booked by email


Henry Baye climbed the ranks of Standard Chartered in West Africa. In his first CEO role with the bank – at Standard Chartered Jersey – he is gearing up to help the Channel Islands operation embrace digital innovation and capitalise on the African market opportunity

What’s your background and how did you get to where you are now? I grew up in a strict Christian home, where values and discipline were everything. When I think of the people who have really had an impact on my life, the first person I talk about is my grandmother and the next is my mother, who passed away last year. She played an amazing role in my life. I have two sisters. I lost my only brother last year as well, so it was a tough year. But I grew up in a small and extremely well-knit family. Just to give you a sense of that, I’ve been in Jersey for only six months but both of my sisters have visited with their families. I’m married, with five children – three girls and two boys – who keep me busy. I’m very close to my family. When I’m not at work, that’s where you’ll find me. How did you get involved in the financial services sector? I studied at the University of Cape Coast in Ghana. I did a degree in accounting with a diploma in education and my dream then was to be a university professor. In the course of collecting data for my research, I met a guy who I became acquainted with. We spoke a couple of days and by the third day he just looked at me and said: “You sound like a smart guy, wouldn’t you like to work for Standard Chartered?” I didn’t know who he was, but I found out later that he was a recruitment manager for Standard Chartered in Ghana. The rest is history. You talked about the values that you learnt at home. Have you taken those values into your professional life as well? Absolutely. Authenticity is probably the value that has become the most powerful for me in my leadership journey and I’m pleased to see that today’s management writers are talking a lot about authenticity when it comes to leadership. We have gone from a time when leaders were supposed to put on an act to a time, today, when people are looking for leaders who are authentic,

18 February/March 2020

who keep their word, who are interested in other people and actually invest in people selflessly. They’re looking for leaders who look vulnerable when they have to be; leaders who can make mistakes but are honest about it. I’ve been privileged to have been brought up by a mother who was at pains to instil these kinds of values in me.

In Jersey, we provide a platform to bank all our clients within our network who want international banking within a jurisdiction that’s very strong from a regulatory perspective. For me, Jersey enables us to drive prosperity for our clients, making us the very heartbeat of our platform for prosperous relationships.

You recently became CEO of Standard Chartered’s Jersey operation, part of a much larger global bank. How does the Jersey operation fit into the bigger picture? The purpose of Standard Chartered is to drive commerce and prosperity. We’re a British bank, but the major markets in which we operate are Asia, Africa and the Middle East. In the past few years, we have also said we want to be a platform for prosperous relationships, and that is linked to our ‘Here for good’ brand promise. So wherever we are, we want to be known for driving trade, driving prosperity and being here for good, which means being relevant to the communities in which we work.

What is the bank’s USP? Our unique proposition is the sheer variety of products we can give to our clients to drive commerce and prosperity, which they probably wouldn’t get in most places. We are also a unique door to the mortgage opportunity in central London. We offer mortgages to clients who, for various reasons, want to own a house there. For example, we have a lot of clients from Africa, whose children are studying in London and they want to purchase a base for them, or they are looking to participate in the real estate opportunity in London. So we don’t simply provide an opportunity for our clients to participate in their local market, but we also open up the whole world to them. That helps them to really diversify their portfolio and have more stable returns.

On the African continent, we’re very passionate and we don’t hide that passion. That’s part of my leadership style. I am big on inspiring people

Prior to taking on the role in Jersey, you had a successful period as Head of Retail Banking for Standard Chartered in West Africa, and held leadership roles in other banks in that region. What are the most useful skills and experiences you bring from the African to the Jersey market? The first thing is passion. On the African continent, we’re very passionate and we don’t hide that passion. That’s naturally part of my leadership style. I lead with passion. I am big on inspiring people and that’s key. The other thing I bring is an understanding of the African market. I have a good group of CEOs within the Standard Chartered network. I know people in the governments. The network we have within the continent is important in helping us build the bridges that instil confidence and

Words: Eila Madden Photos: Charlie Surbey



interview Henry Baye

February/March 2020 19


trust. When you’ve got people sitting in one location and putting their money in another location, that’s a big vote of trust and I put a face to that trust. I put a face to the name of Standard Chartered Jersey within the bank’s global network. That’s important in helping colleagues in Jersey connect with business in Africa and helping clients in Africa see that what we offer here is an extension of the proposition we offer in the various markets. What is the potential of the African opportunity for the Jersey operation? We have looked at the propensity of various continents to want to keep funds offshore. There is a 75% propensity in Africa to keep funds offshore. That drops to probably 60%-plus for the Middle East. So there is a strong desire for clients to want to bank offshore for various reasons – people want to diversify their portfolio, they want to take advantage of opportunities in other markets. Stability is key for a lot of people. Quite a lot of economies in Africa have currencies that are depreciating from time to time, so people are looking for stability of currency. So the need and the opportunity are big. The total amount of wealth in Africa is $2.2trn, according to AfrAsia Bank’s Africa Wealth Report 2019, and out of that about 42% is controlled by high-net-worth individuals. Today, Africa has the youngest population in the world and one of the fastest growing middle classes. Recent projections suggest that, in about 30 years,

20 February/March 2020

Africa’s population could easily be three billion – it is currently almost one billion. So if you’re looking for a market where there is future opportunity, Africa is it. You also have a rich background in digital – so how will this be of benefit to Standard Chartered Jersey? The last project I did before I came here was to roll out our first end-to-end digital bank in Côte d’Ivoire, and then we started extending that to other markets. That’s probably one of the most exciting things I’ve done in my career, because we started with a plain sheet and identified all the journeys that our clients walk with us in the manual environment and digitised them. Even more interesting was being able to get the necessary regulatory approvals and for regulators to see that for every control we had in the real world, we had an equivalent control that works through digital. Africa has leapfrogged many regions when it comes to providing financial services in digital environments. Today, there’s quite a lot of work we need to do in Jersey on our digital proposition and I’m at the forefront of trying to leverage my experience to make that happen. How does the Jersey operation need to innovate digitally? There are three elements. When you think about digital, the first thing is the client experience. Let me give you an example. Typically, if you lost your debit card, you

would have to pick up the phone and call the contact centre, or go to a branch. In Côte d’Ivoire, we digitised that journey by enabling customers to block a lost debit card and order a new one via their smartphone. Digitising a service journey creates a very powerful client experience. The second thing is putting control in the hands of the clients. As bankers, because of the controls required to manage risk, we keep too much control with us. And I’m using ‘control’ in two different contexts. For example, if a client needs to do a transaction, we bring them in to sign lots of papers because we need to be able to say the client did this transaction and it wasn’t initiated fraudulently. But how about giving the client facial recognition or some form of biometric on their bank app? That’s the highest form of security. If a client accesses a mobile app using facial recognition to do a transaction, it is difficult for the client to say: “I did not do that transaction.” So you put control in the hands of the client and yet you have security around it. The third element is about not placing limits on what the client can do. If you’re not giving your client a digital experience, you’re saying the bank closes at 5pm. But as soon as you put digital in the hands of the client, you’re saying the bank never closes. There’s no limit to when and where you can do your banking. Those are the areas in which we need to improve in Jersey. We currently have digital apps for our clients, but it requires quite

as soon as you put digital in the hands of the client, you’re saying there’s no limit to when and where you can do your banking. Those are the areas in which we need to improve in Jersey


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© 2020 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.

February/March 2020 21

Interview some work and I think we need to move towards a place where we can offer clients some of these things I’ve talked about. Becoming more digital could make you more vulnerable to the risk of cyber crime and you’ve highlighted that as a challenge. How is the bank tackling this issue? Every individual in the world is constantly exposed to the risk of cyber crime, so it’s extremely important that, as a bank, we are vigilant about it. The bank does have a cyber framework that is used to look at all the levels of security and checks that constantly need to be in place. One of the reasons the digital bank we rolled out in Africa continues to win awards each year is because of the security of the platform. The thing about cyber security is that you have to be on top of it every single day. That’s the only way you can be two steps ahead of the people who commit these crimes because those people are improvising every single day. You put up one barrier and they try everything to scale it, so you put up another barrier and they try everything to scale that. You must constantly be two steps ahead of what cyber criminals are doing. You’ve also highlighted financial crime as a major challenge for the sector. Financial crime needs to be stopped because of what it does to the world. Financial crime is detrimental to children. Children are trafficked into prostitution in various places. Children become child soldiers in various places. They are maimed on the war field when they should be in school. There are lots of people who are getting destroyed. Futures are being destroyed because of drugs, and economies are being destroyed by rampant corruption. These are the topical issues when you talk about financial crime and I think the least a financial institution can do is to refuse to become a conduit for these crimes around the world. Standard Chartered has made a very clear statement that we’re going to be leaders in fighting financial crime. It’s not easy because it requires you to put controls in place, some of which will annoy your clients because you’re constantly asking for certain kinds of information, but we want to play a part in keeping the world safe and making the world a better place for people to live in. Is this issue solely about putting more controls in place? In some of our markets, we have played a thought leadership role, educating our clients about financial crime and cyber crime. Through our Correspondent Banking Academies, for example, we are inviting banking clients, public sector development organisations and other

22 February/March 2020

Never in the history of the world did we hear about negative interest rates as a concept until recently. And there are challenges around the changing financial industrial landscape. Thirty years ago, the competitors of banks were banks, but that landscape has significantly changed. Today, the competitors of banks are telcos, microfinance institutions, fintechs and, lately, technology giants. So it’s become an extremely complex playing field and all of these things pose challenges to banks.

FACT FILE Name: Henry Baye Position: CEO, Standard Chartered Jersey Age: 50 Home town: Keta, Ghana Studied at: University of Cape Coast and University of Ghana, both in Ghana First job: Personal Financial Consultant at Standard Chartered Bank Family: Married with five children Hobbies: Singing, poetry-writing and cooking Did you know: I have walked under the sea – an amazing experience in Mauritius

players to come and hear speakers from Interpol and other partners talking about financial crime risks. We call it de-risking through education. By creating awareness around this issue, we hope to prevent organisations from withdrawing from markets that are vulnerable to financial crime because, when they withdraw, it becomes difficult to do important things such as disburse aid to the people who need it most. What other challenges are on your radar, not just for Standard Chartered Jersey, but for the sector as a whole? The geopolitical landscape today – from Brexit to the China-US trade war to weakening economies all around the world – presents enormous challenges for financial institutions. Banks only thrive when economies thrive; it’s as simple as that. So geopolitics is a big risk. One of the other challenges during the past few years has been thinning margins.

How should banks respond to this? Innovation, innovation, innovation. You’ve got to constantly transform the way you serve your clients, giving them a better and better and better experience. We must also begin to understand the digital landscape and align with it. The financial landscape today is an ecosystem. If you’re a bank and you see a fintech as your competitor, you’re getting it wrong. You should see a fintech as your collaborator and a bridge for you to reach a much wider opportunity. Today’s technology giants – the Googles and the Apples of the world – are engaging in co-creation, which means that they’re creating something with their customers and their clients. That’s where the world is going. So it’s important that banks see their role in that system – otherwise, they will become extinct. This summer will mark your first year in your new role. What are the key milestones you hope to have achieved by then? The first thing I would like to achieve is investing more and more in our workforce – that’s a top priority for me. The second thing is to be able to get a sense that our business is future-proof – in terms of our platforms and processes – so that we can leverage the opportunities that we have our eyes on. And I want to see the bank adding more value to our communities. Jersey is abundantly blessed with lots of opportunities for our people to contribute to the community we operate in by way of volunteering, working with charities and just doing some amazing stuff. Today, the bank sponsors the annual Jersey Marathon, which is a fantastic way in which we contribute to the community. But I want to see a lot of other ways in which we can really make a difference and demonstrate that we’re truly here for good. We have launched our new community engagement programme – Futuremakers by Standard Chartered – which focuses on how we can help the future generation to learn, earn and grow under the three pillars of education, employability and entrepreneurship. A year from now, I think we should begin to see green shoots from some of these efforts. n

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HSBC fees are now smaller, so you can invest in something bigger.

A new year comes with new adventures, challenges and opportunities. A time to look at planning for the months ahead. Plan for more with HSBC - we’ve reduced our fees* for financial advice as part of HSBC Island Offers. Invest today to create a better tomorrow for you and your family. Time to invest.

Reduced fees to help you invest in something bigger.

If you have time on your side to grow your money, investing for growth could be a good option for you. Investing your capital in the right way could also mean you can receive regular payments that can be used to boost your existing income.

Investments could have a better chance of producing favourable returns the longer they are left to grow. To help you start to plan for something bigger, we’ve reduced our fees* for financial advice as part of our Island Offers. Upfront fees are now just 2% during the offer period, for both new and existing HSBC banking customers.

A portfolio that works for you. Whether you want to invest for growth or income, we’ll make the best choice for you based on asset classes, geographies and currencies. You may be experienced, or a first-time investor and prefer for us to take care of things for you. Wherever you are in your investment journey, we tailor our advice to suit your needs and assess your appetite for investment risk. “Our customers expect banking tools and wealth solutions that match their personal circumstances. That’s why our personalised advice service makes wealth management advice available to all types of investors.” Tania Sobey - Country Head of Retail Banking & Wealth Management, Jersey

HSBC Island Offers. We’re committed to supporting you and your family now, and for the future. Our wealth promotion is part of a wider range of Island Offers, available until the end of March.

We’re right with you, whatever you’re set on achieving this year. Ask in-branch about ‘Island Offers’ 03456 006161 *Please remember that the value of investments, and any income received from them, can fall as well as rise, it is not guaranteed and you may not get back the amount you invested. Financial and other eligibility criteria apply. Product charges will apply. You must hold or open an eligible HSBC bank account and invest a minimum of £25,000. Terms and conditions apply.

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. All Rights Reserved. 200114/IC/023.

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Reduced fees of on global investments.* We’re right with you. Reduced fee from 2.75% Top up whenever you like** Investing for growth or income

Ask in-branch about ‘Island Offers’ 03456 006161 *In order to make investments with HSBC, you will need to hold an HSBC current account and invest a minimum of £25,000. **Charges will be applied. Please remember that the value of investments, and any income received from them, can fall as well as rise, is not guaranteed and you may not get back the amount you invested. Terms and conditions apply.

Issued by 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 and is a participant in the Jersey Bank Depositor 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, or on request. HSBC Bank plc is a member of the HSBC Group. Its ultimate parent company is HSBC Holdings plc. The UK Financial Conduct Authority is the lead regulator for HSBC Holdings plc. HSBC Bank plc places funds with other parts of its Group and thus its financial standing is linked to that of the Group. Publicly available information, including reports and accounts is obtainable from Full details are available on our website at © HSBC Bank plc 2020. All Rights Reserved. 200114/IC/023.

Future view

Words: Alexander Garrett


As the page turns on another year – and decade – industry leaders from across the Channel Islands share their views on the challenges and opportunities that lie ahead TWENTY-TWENTY VISION is beneficial at any time, but as we wave goodbye to 2019 and enter the year 2020, having a clear view of what’s in store for the 12 months ahead is particularly topical. Some major foreseeable events are likely to shape the year ahead – the US presidential election late in the year and Brexit, to name just two. But what’s harder to anticipate is the


26 February/March 2020

effect of events that we’re not even aware of yet – Donald Rumsfeld’s “unknown unknowns”. And longer-term trends will also play a significant role in shaping the landscape ahead, especially in areas such as the environment and technology. So, what do Channel Islands business leaders see as the key challenges and opportunities this year?

1. BREXIT UK Prime Minister Boris Johnson won his much sought-after majority and, by the time you read this, the UK may well have effectively left the European Union. But that doesn’t mean there aren’t still major challenges ahead. “The challenge is that we are still only halfway there,” says Andrew Shepherd, Chief Executive at investment manager and financial planner Brooks Macdonald International. “The uncertainty of how the trade negotiations are going to pan out will make it difficult to make investment decisions. We need to see more clarity, which we’ll start to get as we move through 2020.” Jersey Finance CEO Joe Moynihan adds: “Jersey is not part of the EU or the UK, so our access to the EU for financial services is not dependent on the UK, because our regulator has agreements across the member states on a bilateral basis. Nevertheless, we are very much aligned with the City of London and a lot of our business comes through there, so in the longer term anything that turns out to be bad for the City would have implications for Jersey.”

Future view


2. TRADE WARS US tariffs last year were largely responsible for the recent slowdown in global growth, says Michel Perera, Chief Investment Officer of Canaccord Genuity Wealth Management, but the markets may be premature in assuming that the announced ‘Phase 1’ deal between China and the US marks the end of the trade war. “The US is now turning to Europe for tariffs,” he says. “Also, President Trump is trumpeting his China deal to help his re-election. But there’s nothing to stop him from slapping on tariffs again after the election. So the world will have to get used to lower growth and uncertainty on trade for some time.” From Jersey’s perspective, manufacturing goods and import/export are relatively small parts of the economy, adds Moynihan, and the main impact of trade tariffs is their effect on slowing global trade, reducing capital flows and curtailing private wealth. “One potential area we would be concerned about is if (Trump) goes after European financial institutions. Since many of those institutions have operations here, that could have an impact on Jersey.”

A key legislative change in Guernsey this year is the proposed all-embracing discrimination bill – already put out to consultation by the Committee for Employment and Social Security. It was going to cover gender, age, race, religion and disability but is likely to be pared down. “The most controversial part is on disability,” says Elaine Gray, a Partner at Carey Olsen Guernsey. “The traditional approach used by jurisdictions such as the UK and Jersey relies on medical diagnosis and evidence that you are disabled and your condition has lasted a reasonable period,” she says. “By contrast, Guernsey wants to go with legislation based on the ‘social’ model: do you perceive yourself to have a disability or barrier to working? If so, you have protection. It’s fair to say, the proposals have provoked quite a strong reaction, including from the business community. What was proposed meant that someone could turn up with no more than a hangover or a cold and, because they perceived themselves to be ill, they would attract protection.” The concern is that Guernsey will lose competitive advantage to its neighbours, and fierce lobbying can be expected.

3. FINANCIAL MARKETS Will the long-running bull market continue throughout 2020, or are we set for a sharp correction, as some commentators expect? Everyone knows it must end at some point, but nobody knows when. “Valuations are toppy after a strong year, but they’re not ridiculous,” says Shepherd. “We are not about to see bond yields rise off the back of interest rate rises, so that’s not going to drive down equities, and there’s good news around Brexit and the UK election.” A crucial point could be that markets generally do well in a US election year, he adds. “This year, lower risk portfolios have managed doubledigit returns and higher risk ones twice that. We won’t see replication of those returns, but I think we could certainly expect to see portfolios outperforming cash and inflation.”

A further challenge for Channel Islands businesses will be demonstrating that they comply with new substance legislation – designed to ensure tax is paid where it is generated, and that companies based in offshore centres have real substance and are not just vehicles for transferring profits and avoiding tax. “Guernsey, Jersey and the Isle of Man all worked really well together on this and got their substance regimes signed off by the EU Code of Conduct Group,” says Gray. “The first tax year it was effective started on 1 January 2019, but since then the guidance has been trickling out, and now companies will have to do their first filings, without it being clear how each tax office is going to interpret the legislation. Will they be heavy-handed and insist on complete compliance? Or will they be more understanding?” The demands for IP-heavy companies will be onerous, and the penalties for non-compliance serious, she adds.


February/March 2020 27

Future view

S E I T I N U T R O P P O THE 1. BREXIT (AGAIN) As well as being a challenge, some believe Brexit also represents an opportunity for the Channel Islands. Chris Gnapp, Managing Director of Leapfrog Recruitment Consultants, says: “In Guernsey we’ve trade agreements already in place with EU countries because of being a Crown Dependency, whereas the UK now has to go in and negotiate. We are in a strong position with Brexit, and I think we’ll win business.” Jersey Finance CEO Joe Moynihan echoes this. “One of the positives Jersey can offer, particularly to the international market, is that we can provide some stability and certainty of outcome at the moment. Our status is not going to change – potentially, others may not be able to boast the same. So, from our perspective, that certainty is attractive to institutional investors and makes Jersey a jurisdiction of choice.”

2. TRANSPARENCY When the EU updated its list of non-cooperative jurisdictions in 2019, Jersey and Guernsey were moved from the ‘greylist’ to the ‘whitelist’ of jurisdictions seen as transparent and compliant. That’s provided a definite fillip to their competitiveness, particularly compared with the 15 or so jurisdictions left on the blacklist. And those looking to set up companies and similar structures will prefer jurisdictions with a good reputation. Andy Sloan, Deputy Chief Executive, Strategy, at Guernsey Finance recently reported: “We are seeing increased numbers of inquiries from fund managers looking to migrate to gain the confidence and security from domiciling in a jurisdiction of genuine economic substance. Many friends, lawyers and administrators alike are reporting a significant uptick in company migrations.”

3. GLOBAL REACH Both Guernsey and Jersey have been adopting an increasingly global outlook in recent years. Jersey Finance opened its first office in the US – in New York – last year, and building on that will be its main focus in 2020. The body already has offices in Hong Kong and Dubai, and also focuses on South Africa, as well as Nigeria and Kenya – particularly on fund promotion. “Over half our new business now comes from outside Europe,” says Moynihan. “We need to be selective where we invest our efforts and we always manage the reputation of the jurisdiction.” Guernsey has also upped its game. Guernsey Finance sent roadshows to seven major markets including South Africa, the US, the Middle East and Asia last year. It also appointed James Crawford to lead its international business development team, and Middle East consultant Louise Bougourd, alongside existing representatives in London, Hong Kong and Beijing. Meanwhile, Guernsey-based regulatory consultancy Midshore announced the launch of a joint venture in the US to attract more Americansourced work to the island.

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Future view

4. TECHNOLOGICAL INNOVATION Harnessing technology has been an ongoing theme in financial services for a long time, but if anything, the pace is accelerating. “The big change I see is the challenge from fintech companies. The innovation going on there will probably move a lot faster than in previous years,” says Moynihan. “I think we’ll see more collaboration between small fintechs and bigger players to take advantage of the opportunities coming out of those companies. As a jurisdiction, we encourage that through our collaborative work with Digital Jersey.” Elaine Gray from Carey Olsen also cites fintech as an example of the applied knowledge at which Guernsey and the Channel Islands can excel. And from a recruitment perspective, Chris Gnapp says: “We see tech development roles and cyber security roles as two growth areas in 2020, whether that’s in-house or with outsourced service providers.”

5. ENVIRONMENT There is a growing appetite for investments that are sustainable, a trend that has fuelled the early success of the Guernsey Green Fund platform introduced in 2018. At Brooks Macdonald, Andrew Shepherd says: “We launched our responsible investing range in the UK 15 months ago and we are planning to launch a range here in the second quarter of 2020. That’s because of a desire on the part of investors to know that their money is being invested in companies that are well run and on a sustainable basis. So personally, I see that as a trend that will continue to grow.” Hitherto, the Channel Islands has had a poor record on generating its own sustainable power. But, as Gnapp points out, the islands have some of the strongest tides in the world that could be harnessed to provide power. Perhaps that’s another question that will be addressed in 2020? n

February/March 2020 29


Japanisation is it really happening and what does it mean for investors? When Japan adopted a zero interest policy two decades ago, it seemed an anomaly, but now that the symptoms of low inflation, low growth and low interest rates are spreading around the world, investors are asking whether Japanisation is here to stay Words: Phil Thornton

JUST OVER TWO decades ago, Japan gave economists and investment managers a strange new acronym — ZIRP or zero interest rate policy. While sounding like an alien from the Space Invaders game, it marked the start of a new era of low growth, inflation and interest rates affecting many western economies, and it’s come to be known as Japanisation. In October 1999, the Bank of Japan (BoJ) cut its official interest rate to zero. Two years later, it started to use quantitative easing (QE) policies, increasing how much commercial banks had to hold in their accounts at the BoJ far in excess of the reserve levels previously required. What at the time were regarded as highly unusual measures were a response to a series of events that initially reassured global investors that this was purely an issue for Japan. But since then, major economies across North America and Europe have found themselves languishing in an environment of low inflation and low growth that has forced them to slash interest rates and inject money

30 February/March 2020


into the financial system. “Look closely, and to a greater or lesser extent, much of the developed world seems to be turning at least a little Japanese,” says Neil Shearing, Group Chief Economist at consultancy Capital Economics. It’s worth examining Japan’s track record. The reasons for, and some of the causes of, its problems will be familiar to today’s investors, while others are due to the nation’s own circumstances. In 1985, Japan and the other six of the Group of Seven (G7) nations agreed to a significant appreciation of the yen, bringing exports to a standstill and abruptly halting growth. The BoJ slashed interest rates to a then-low of 2.5% and adopted QE, while the government launched a fiscal stimulus. The cheap borrowing costs fuelled a boom in the equity and housing markets that the BoJ tried to curb with sharp hikes in interest rates. The resulting crash in 1990 left the banking sector holding a pile of non-performing loans.

EUROZONE AS EPICENTRE Fast forward almost 20 years and many economies in the West have fallen victim to similar symptoms following the global financial crisis of 2008 and 2009. Central banks and governments have struggled to stimulate economic growth and inflation in the wake of a severe banking crisis, despite cuts in interest rates to zero and the injection of trillions of dollars into the financial system. Major advanced economies, including the UK, US and Australia have seen inflation rates fall and growth stagnate, although they have not fallen into negative interest rate territory. In fact, the US Federal Reserve raised rates nine times from late 2015 to mid-2019 before it started cutting again. But the epicentre of Japanisation is the eurozone, where the European Central Bank has held its main refinancing rate at zero since 2016. In September last year, it cut the deposit rate by 10 basis points (0.1 percentage points) to -0.5% and unveiled an openended QE programme of €20bn a month. Despite this, its inflation rate has hovered around 1% to 1.5% for the past five years, almost consistently beneath its target of 2%. Carsten Brzeski, Chief Economist for investment bank ING in Germany, says the eurozone is now showing pronounced similarities with Japan in the early 1990s. “A financial crisis turns into an economic crisis, which then turns into a banking crisis and finally into an existential crisis,” he says.

As a result, all actors in the eurozone economy have had to get used to the new environment of low inflation and low or negative interest rates. For Andrew Milligan, Head of Global Strategy at Aberdeen Standard Investments, banks are the primary victims as low inflation or deflation, and near-zero or negative interest rates, hamper their growth potential and profitability. “Banks find it very difficult coping with low growth,” he says. “If you have started to go in a direction where people expect

February/March 2020 31



prices to fall and are worried about their job prospects, that is bad news.” Amit Kara, Associate Research Director for Global Macroeconomic Analysis at the National Institute of Economic and Social Research (NIESR) in London, says asset managers will come under sustained pressure to deliver the rates of return their clients want in an environment of low interest rates. They respond by looking for higher yields, seeking out assets that will deliver higher returns such as property and even alternative assets such as art, all of which tend to be more illiquid. “That may mean taking on currency risk and exposing themselves to sectors and regions they may not have otherwise been prepared to do,” Kara says. Low interest rates and borrowing costs have favoured assets such as property and equities in some stock markets, but the downside of this is a negative impact on those who do not own assets, such as young people and those on low incomes. This has been compounded by the meagre growth in wage levels. For instance, in the UK, average hourly wages are roughly at the same level now as they were in 2008, according to the Institute for Fiscal Studies. Given that they usually rise

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every year, this means they are 19% below the level they would have been had longterm trends continued. “Consumers are becoming aware that this may be a low-inflation world, which they like, but it is also a world of low real incomes growth – and people can get upset by that,” Milligan says.

HERE TO STAY The question facing policymakers, financial firms and households alike, especially in Europe, is whether their Japanised economy is here to stay. Perhaps the downsides have been overplayed. Shearing at Capital Economics says that since the start of this decade, Japan’s working age population has contracted by about 0.5% a year. Yet despite this, GDP has risen by an average of 1.3% a year, while GDP per capita has increased by an average of 1.5% a year. “Japan’s economic performance has not been all that bad – or at least not so bad as to justify some of the more extreme headlines it’s received,” he says. One concern for the eurozone is that negative interest rates have left policymakers with fewer tools to combat another downturn. Economies such as the

UK and the US managed to avoid negative interest rate territory by intervening effectively to sort out their crisis-hit banks – something the eurozone has been slower and less effective at doing. Kara believes that Japan’s experiences show that it will be very hard to escape a low-growth and low-inflation environment without reverting to looser fiscal policies and policies aimed at increasing productivity growth. Holger Schmieding, Chief Economist at German bank Berenberg, says that Japanisation is probably here to stay, but that it is wrong to see the eurozone as “suffering” from it. “Low interest rates and very low inflation are not that bad,” he says. “There are no features of deflation or any evidence of the real burden of debt stifling anybody.” There is not much that policymakers could or should do about it, he says. “It is a global phenomenon – global interest rates are low and will remain low. It is for demographic reasons that the eurozone is even lower than the US, where they are running deficits of 4% or 5% of GDP. “If you have reckless borrowing here, you could get interest rates up, but I am not sure that is the right recommendation.” n Benny Marty

Japan’s economic performance has not been all that bad – or at least not so bad as to justify some of the more extreme headlines it’s received

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Jersey gets the deal done

Jersey schemes of arrangement have become a procedure of choice for complex and ultra-high-value cross-border M&A deals, say Ogier Partners Simon Dinning and Nick Williams, and Managing Associate James Angus

ONE OF THE MOST marked developments in offshore corporate restructuring in recent years has been the upsurge in the use of Jersey schemes of arrangement. Jersey schemes have become a procedure of choice for complex and ultra-highvalue cross-border M&A deals and there is every indication that this popularity will continue. In the past two years, we have seen the highest value mergers by schemes of arrangement in Jersey’s history take place – Shire’s merger with Takeda Pharmaceutical, and Randgold Resources’ merger with Barrick Gold Corporation. Jersey schemes have much to recommend them to complex cross-border deals: a defined structure, a set timetable and a methodology for the swift, effective and fair gathering of shareholder consensus. Under the provisions of Article 125 and 126 of Jersey’s Companies Law, the Royal Court can sanction a compromise or arrangement between a company and its creditors or members. The scheme must have been approved by a majority in number representing three quarters in value of the creditors or three quarters

of the voting members at a specific meeting convened for the purpose. The threshold is seen as a commercially viable route to progressing a transaction that has significant shareholder support. The final seal of approval by the Royal Court ensures scrutiny to all shareholders. Jersey is an increasingly attractive restructuring jurisdiction, particularly as regards schemes, and is competing with other offshore jurisdictions more traditionally associated with restructuring and insolvency. Crucial to this is the strength, reputation and accessibility of the Royal Court. The proponent of a scheme must demonstrate to the Royal Court that a meeting should be called and, at the end of the process, the Court will consider whether the scheme is a proper one for sanction and that the proposals are in the best interest of members or creditors. Where members or creditors object, the application can be fully argued. Getting a scheme through to completion is a joint effort. The legal team will comprise corporate and dispute resolution specialists. The corporate lawyers will have

particular expertise on the technical aspects of the deal itself and the litigators will take responsibility for the Court-facing aspects. As litigators regularly presenting schemes to the Royal Court, we receive consistent feedback from clients (large onshore law firms and the businesses they advise) that the dependability of the scheme process in Jersey is seen as key. Jersey is very much viewed as a safe, reliable, well-regulated jurisdiction to do business in. The island’s compendious scheme jurisprudence and the rigorous approach of the Royal Court are major advantages. The presiding judges are commercially experienced and provide reasoned judgments of the relevant principles to be addressed. With Jersey’s company law heavily based on English principles, if there is any issue that has not yet been determined in previous Jersey case law, English jurisprudence on the point will be highly persuasive. From the client perspective, this established jurisprudence and robust court structure, combined with the time zone and location, make Jersey as sure and reliable a scheme jurisdiction as England and Wales. n

the dependability of the scheme process in Jersey is key. Jersey is viewed as a safe, reliable, well-regulated jurisdiction

February/March 2020 33

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Building a plan for the long term Natural human emotions can lead to poor financial decision-making during the cut and thrust of the market cycle. To mitigate that risk, following an investment plan based on a robust framework is crucial, says Philip Legrand, Client Advisor at UBS in Jersey WE’VE ALL HEARD the age-old cliché that we should ‘buy low and sell high’, but humans are emotional beings. We tend to be underwhelmed by successes and magnify our losses. Investors are no stranger to this behavioural bias. Therefore, it is likely to be a case of ‘buy pretty high and sell lower when fear takes hold’. Many investors tend to make their costliest errors during transition points in the market cycle. There is nothing particularly abnormal about this behaviour, but it can pay dividends to avoid it at all costs and take a longer-term view on your wealth. One way to help investors navigate tricky times in markets is to have a plan in place and – more importantly – to stick to it. At UBS, we see the latter stage of an economic cycle as the best time to lay the foundations of your financial plan – before the next downturn. Our Liquidity, Longevity, Legacy (3L) approach to wealth management can help you plan for your long-term goals while reducing the danger of falling prey to costly decisions during downturns. The 3L framework allocates your wealth into three strategies: 1. Liquidity – A Liquidity strategy is designed to fund expenditures and meet liabilities for the next two to five years. Investments should be held in safe assets

34 February/March 2020

with low volatility, typically cash, and/or a high-quality bond. 2. Longevity – A Longevity strategy helps you meet your financial goals for the balance of your lifetime and is characteristically well diversified across asset classes with a growth orientation. The exact composition of the portfolio depends on your situation, financial goals, personality and values. 3. Legacy – A Legacy strategy includes assets that are in excess of what the family members need to meet their own lifetime objectives. Generally, investors slowly spend down their longevity assets during retirement. At the same time, legacy assets are generally unencumbered so they can appreciate in value.

HOW THE 3L FRAMEWORK CAN HELP INVESTORS NAVIGATE BEAR MARKETS Most investors loathe equity bear markets. However, for those who are still accumulating assets, they can actually represent important opportunities to invest in growth at a lower price. As a result, if managed properly, market downturns (though emotionally difficult) can increase long-term wealth. With the equity bull market ageing, now is a good time to consider sufficient liquidity requirements in order to avoid being forced

to sell assets at depressed levels when the next bear market finally arrives. The 3L approach can help mitigate such ‘sequence risk’. It enables investors to spend out of their Liquidity strategy during drawdowns. By doing so, they give risk assets in their Longevity strategy time to recover before having to sell them for spending needs. This was illustrated most clearly during the tech crash around 2000. Consider

By embedding major financial decisions in specific financial goals and objectives, our 3l framework provides guidance during difficult periods

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investors who wanted to spend 4% of their initial wealth annually in retirement. If they began filling their Liquidity strategy in 1999 before retiring in 2002, then spent out of their Liquidity strategy and only refilled it once the Longevity strategy’s portfolio recovered from the drawdown, by 2017 they are likely to have had 4% more wealth than if they had spent directly out of their portfolio.

RESISTING MARKET TIMING WITH THE 3L FRAMEWORK Aside from forced selling, the turn of a market cycle can also be problematic due to the temptation to make significant changes to your portfolio at the wrong time. In Trading is Hazardous to your Wealth, Brad Barber and Terrance Odean indicate that households with the highest portfolio turnover underperformed average investors by 5% per year and trailed lowturnover investors by almost 7%. One way of minimising risk related to costly emotional behaviour is to establish a disciplined investment approach, such as rebalancing. Selling top-performing asset classes and buying worse-performing asset classes can be counterintuitive, but our

analysis shows establishing a disciplined rebalancing approach within the 3L framework can add 0.8% alpha (the excess return of an investment relative to the return of a benchmark index) annually. The 3L framework may not be a panacea for solving our own emotional biases, but it can provide a framework for decisionmaking that investors can fall back on during times of market stress. Investors are more likely to think twice about selling assets associated with long-term objectives. By embedding major financial decisions in specific financial goals and objectives, the framework provides guidance for action during difficult periods.

HAVE A PLAN AND STICK TO IT Nobody is perfect. The next time news reports detail a possible downturn, no matter how big or small, be sure that personal psychological biases will play tricks. Having a plan and sticking to it can be the difference between compound growth and cashing out when your portfolio is performing poorly, then having to buy in at a higher price. n


If you would like more information on how UBS Wealth Management in Jersey can provide support, please contact Philip Legrand: Philip Legrand, Client Advisor UBS AG Jersey Branch 1, IFC St Helier, Jersey JE2 3BX Tel: 01534 701180 Email:

© 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 2020. All rights reserved.

February/March 2020 35

Offshore structures

TRANSPA A greater push for transparency in offshore structures is a good thing for blue-ribbon jurisdictions such as Jersey and Guernsey, experts say, but its contradiction with privacy laws will need to be ironed out

Words: Chris Wheal

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PERCEPTIONS POSE PROBLEMS. Publication, in 2016, of the Panama Papers gave a fillip to the preconception that offshore structures were secret havens for criminals and tax evaders. Demand rose for increasing transparency. But do those demands go too far? Plenty of action on anti-money laundering (AML) and countering the financing of terrorism (CFT) had already happened. Inter-governmental body the Financial Action Task Force (FATF) was established in 1989, the FATF Recommendations were published in Paris in 2012, and there were UN resolutions in 2014 and 2015. The US introduced the Foreign Account Tax Compliance Act (FATCA) in 2010. Many jurisdictions, including the Channel Islands, had significantly upped their controls. But the Panama Papers accelerated calls for change, almost prompting Theresa May’s government to legislate over the Crown Dependencies. Even avoiding that constitutional crisis, the use of common reporting standards and the introduction of the UK’s Trust Register – potentially affecting certain offshore activities – have created work for Channel Islands investment experts. It’s easy to see why. Within a couple of years of the Panama Papers being published, governments around the world collected more than $1.2bn in additional taxation. The public perception – shared by politicians – was that all offshore

jurisdictions were the same: secret stashes of unaccounted cash could be concealed there, so urgent action was needed. Within the European Union (EU), the fourth and fifth AML Directives have seen parliamentarians get increasingly tough, seemingly prepared to throw privacy under a bus as they drive through draconian rules. The 5AMLD sets out a series of implementation dates (see box overleaf), between which there will be significant legal case work that may help set the boundaries. Within the EU, conflicting with the 5AMLD provision to publish and be damned, sits privacy and data protection legislation, particularly the onerous and restrictive General Data Protection Regulation (GDPR) regime.

KEY CONFLICT Stephen Ozanne, Senior Counsel at Walkers Global, pinpoints a key conflict. Paragraph 30 of the 5AMLD begins: ‘Public access to beneficial ownership information allows greater scrutiny of information by civil society, including by the press or civil society organisations.’ It ends: ‘Access to that information would also help investigations on money laundering, associated predicate offences and terrorist financing.’ The primary purpose for publication appears to be to help the press and campaigners dig dirt on the rich and famous, with AML/CFT an afterthought. Actor Emma Watson, who played Hermione Granger in the Harry Potter

Offshore structures




“Our timetable is designed to allow us to see how all the EU states are going to deal with the conflict between GDPR and 5AMLD,” says Ian Rumens, Global Head of Private Wealth at Intertrust in Jersey. “That’s how I’ve interpreted it, and I think it’s clever.”

AHEAD OF THE CURVE The Channel Islands are not being dragged kicking and screaming into a new compliance regime. In many cases, they are ahead of the curve, with more rigorous regimes than mainland UK. Registers in Jersey and Guernsey are all verified, with regulated firms having to comply with strict AML identity checks before registering beneficial owner details. In mainland UK, by contrast, Companies House records are notoriously error-strewn, and with no verification process in place. However, a Companies House spokesperson told BL: “The government has recently consulted on a range of reforms that will, when implemented, improve corporate transparency and provide Companies House with powers to verify information or where necessary to query the information provided.” In a blog on the Companies House website, published when the consultation was launched in June 2019, Louise Smyth, Chief Executive and Registrar of Companies, acknowledged that Companies House had faced problems related to accuracy of information held, abuse of

the crown dependencies’ timetable is designed to allow us to see how all the EU states are going to deal with the conflict between GDPR and 5AMLD

personal information on the register and misuse of UK-registered entities as vehicles for economic and other crime. Yet it remains offshore financial centres that have the reputation as safe havens for criminals. Oliver de la Fosse, Senior Corporate Finance Manager at Oak in Guernsey, says that reputation has not been fair for decades. “But I do think we do our credibility more damage by not acknowledging the fact that Guernsey,

February/March 2020 37

films, was named in the Panama Papers. She stated publicly that she only used offshore structures to protect her privacy, not for tax avoidance. Online publication of beneficial owners could subject celebrities to harassment and stalking, and put individuals at risk of kidnap, extortion or protesters intruding their homes. Individuals are set to launch legal action, arguing that their right to protection under privacy laws and GDPR overrides any legislation that demands publication so that newspapers can publish stories or politically motivated campaigners can target individuals. But concerns run deeper, even around cross-border sharing of data between law enforcement, tax and regulatory authorities. The Bulgarian tax office was hacked in July 2019 and the records of five million taxpayers stolen – might the automatic sharing of registers of beneficial ownership make all that data available to a hacker entering via the weakest point in the network? The Crown Dependencies took the unusual step in 2019 of issuing a joint statement. They have committed to mirroring the EU’s final implementation of 5AMLD and online publication of registers of beneficial ownership. But – crucially – they will delay defining exactly where and how they will publish beneficial ownership data until after the EU has carried out its own review of implementation in January 2022.

Offshore structures like other places, was sometimes used for activities that just wouldn’t be accepted now. But that’s long gone. For the last 20, 30 years, nothing could be further from the truth. For my generation, ‘millennials’ born after 1980, all we’ve known is Guernsey as the exemplar international financial centre. There are few, if any, places in the world with a tighter grip on beneficial ownership.” With verified and accurate registers, the concern in the Channel Islands is about the publication of information currently held privately. “Privacy is an important factor,” says David Dorgan, Private Client and Trust Partner with Appleby. “Jersey has had a register of ultimate beneficial ownership since 1989. Some investors won’t care that it’s published, but some will. They need privacy for their protection.”

PRIVACY, NOT SECRECY His colleague in Guernsey, Dispute Resolution Partner Richard Field, says privacy and secrecy are very different. Any legitimate request from tax authorities, law enforcement agencies and financial services regulators will be met with full disclosure. Those who need access have access through the correct channels. “The Crown Dependencies are about upholding privacy, not secrecy,” he says. Amy Collins, Client Director at Ocorian, says: “Where legitimate confidentiality is a driver, it’s not authorities that cause concern but the public, the criminal element and, in some circumstances, overzealous media.” Ozanne at Walkers warns: “The more assets you have, the more you are a target. You will be in the crosshairs of gangs who want to extract something from you. “In the modern world of the internet, giving people easier access to the kind of information they can use against you in the digital space, or physically, heightens that risk further.” Field hopes the wait-and-see approach will result in an EU nation developing a compromise that meets the requirements laid down by 5AMLD but without full publication online – a beefed-up exception regime, perhaps, or abridged publication. The standard will need to be consistent, he says, to avoid money moving to the least compliant regime. “If there are some EU differences, then you do risk jurisdictional arbitrage,” he says. Ozanne raises the spectre of a sixth AMLD designed to tidy up the discrepancies.

PREPARING FOR THE INEVITABLE Rumens believes the financial services sector must prepare for the inevitable. “The direction of travel in the financial services industry is towards open transparency,” he says. “It’s a good thing for blue-ribbon jurisdictions like Jersey and Guernsey. We are going to see a flight to quality.”

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Open transparency is going to be everywhere. What clients don’t want is to start paying extra for it

He believes that, on publication, the best clients will not want to be seen having offshore structures and companies in regimes considered ‘less desirable’ and will choose to move or reorganise their affairs to the offshore centres with the highest standards. “The higher up the ranking you are in the OECD and international finance rankings, the easier it will be to attract clients,” he says. That could mean a busy time as the deadline for online publication gets closer. “The big challenge is educating clients,”

adds Rumens. “They will have historically seen the transparency issues as only relating to offshore centres. But it’s not only an offshore, midshore or onshore issue. Open transparency is going to be everywhere. What clients don’t want is to start paying extra for it. They want the structures we offer to comply with all the legislation, regulation, taxation and law enforcement, without it costing them.” Oak’s de la Fosse agrees. “Our only viable future lies in maintaining the bailiwick at the very top echelon of international finance. Our competitive advantage isn’t secrecy and shadows – if you want these things, you are not welcome here. In 2020, Guernsey is about transparency, professionalism, discretion and expertise.” Collins believes that clients are savvy to the new rules. “A number are now collating information packs ready to be shared quickly with institutions that require it,” she observes. And there will be more change to come as digitisation increases. Rumens cites blockchain and improved security enhancements, while de la Fosse says the younger generations will expect to manage their affairs on their phones using apps. For the vast majority of clients, these service issues may well become more important than the argument between transparency and privacy, they claim. It will be the perception of quality that prevails. n

EU Fifth Anti-Money Laundering Directive: Key implementation dates • 10 January 2020 Article 30 – Registers of beneficial ownership for corporate and legal entities • 10 March 2020 Article 31 – Registers of beneficial ownership for trust arrangements • 10 September 2020 Article 32a – Centralised automated mechanisms to enable identification of who owns or controls accounts • 10 March 2021 Article 30-31 – Interconnection of registers

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Advertising feature, in association with Locate Jersey


The Maples Group The Maples Group – through its leading international law firm, Maples and Calder – advises global financial, institutional, business and private clients on the laws of the British Virgin Islands, the Cayman Islands, Ireland, Jersey and Luxembourg. The Group is also an independent provider of fiduciary, fund services, regulatory and compliance, and entity formation and management services. With a growing demand from clients based in Jersey to use the Group’s services there, the Group decided to set up on-Island and, a year later, they are clearly impressed with how the business has flourished. Chris Byrne, Managing Partner of Maples and Calder, in the Maples Group’s Jersey office; Robert Lucas, Head of the Maples Group’s Jersey fiduciary services business; and Cleveland Stewart, Senior Vice President in the Maples Group’s fiduciary services business, explain more about the business L-R: Cleveland Stewart, Christopher Byrne and Robert Lucas

40 February/March 2020

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Can you give us an insight into Maples and Calder and the fiduciary services business, and how they fit into the Maples Group globally? Chris Byrne (CB): Maples and Calder, the Maples Group’s law firm, opened an office in Jersey in September 2018. The Group decided it was a natural evolution to expand its international offering into Jersey and Luxembourg to complement its existing services and jurisdictions. It was also recognised that a large number of existing clients were using Jersey and Luxembourg in transactions and there is certainly a real benefit in being able to service clients in more than one place, across multiple time zones. So we followed these clients to the jurisdictions they favoured. Robert Lucas (RL): The Maples Group’s fiduciary services business arrived a bit later than the law firm and started offering services locally in early 2019. Jersey’s business community, which offers highquality professional ancillary services, has been incredibly supportive of us. This provision is really key locally – the combination of legal and fiduciary services offers a turnkey solution that so many clients expect and value in this day and age. CB: The Maples Group has five offices in Europe, including very established operations in Dublin, London, Leeds, Luxembourg and Amsterdam. Our Jersey teams have been fully integrated into the European business and, of course, more widely into the global business. The Group employs more than 2,000 staff globally, with nearly 700 employed within our European operations. Cleveland Stewart (CS): In addition to the clear demand that necessitated a presence here, our European offices find Jersey to be a comparatively straightforward, flexible and yet robust jurisdiction to deal with. This really counts when you’re dealing with complex matters, and the ease of doing business with Jersey is a winning card. Was the process of opening/establishing the office straightforward? CB: Locate Jersey was very encouraging and helpful from the outset – at the end of 2017, the Maples Group approached them for assistance with the move and

Locate Jersey really covered all bases for us – including quickly ensuring that the correct licensing was in place

they really covered all bases for us – including quickly ensuring that the correct licensing was in place. We get the impression that this is a two-way relationship – the industry is proud of the fact that Jersey is a leading offshore jurisdiction, and the Maples Group’s presence here supports the island’s strong, positive reputation in that regard. A leading global firm has chosen Jersey, both out of client demand and choice. In terms of office space, we started at the Regus building, but soon had to expand and find a permanent address. We wanted to be on the Esplanade, near to where the International Finance Centre is based, and so eventually settled on Sir Walter Raleigh House. We have turned it into a very modern workspace and we were incredibly impressed with the speed and quality of the work done by contractors. Not all jurisdictions are that proactive and helpful. RL: It is important to note that we have global colleagues travelling to Jersey regularly, and we’ve found that it has far better travel connections than certain other island jurisdictions – and that makes a real difference to us. CS: While Robert and Chris were already based in Jersey, my wife and I moved over from the Cayman Islands. Settling in has been very easy and the work/life balance here is fantastic – my weekends are free

and interesting, and there’s a real culture of enjoying home life to the full. Locate Jersey was very helpful to both my family and I, and supported me in getting the necessary paperwork to enable me to work here. I’m a former member of the Cayman Islands Basketball Association and I was also fortunate to play for the Cayman Islands National team. During that time, I had the opportunity to travel across Europe, including a stop in Jersey for the Island Games. I knew I would like it from that short visit. I’ve been able to continue pursuing my passion and I now teach basketball in Jersey and am also a member of the Jersey Basketball Association. It’s just over a year since you opened the office – how has the first year been and how do you see the business evolving? RL: The first year has been astounding really – we have grown above and beyond expected targets, which is a breath of fresh air. Because of this, we have forecast significant future growth and will naturally need more people to support this. CB: It is especially pleasing to hear that existing Maples Group clients have told us that their business could not have come to Jersey otherwise. For example, we recently had a US fund manager client referred from our Cayman Islands office in order to set up a Jersey cellular structure to be used in connection with an Australian transaction. That particular client had never used Jersey before. We want it to be clear that we are interested in bringing new business to the island and are actively marketing Jersey through all of our global offices and our 2,000-plus staff members. We want the Maples Group to be seen as a beneficial addition to Jersey as a thriving international financial services centre and I look forward to seeing the business develop and grow as a result. n


This advertising feature was produced in association with Locate Jersey. Visit

February/March 2020 41



The new opportunity

42 February/March 2020


As the Chinese economy pivots from a manufacturing powerhouse to a consumer-driven innovator, international investors are ramping up their exposure to the world’s biggest market

mid-market operators or state-owned enterprises – have large domestic audiences in an increasingly digitised economy,” adds Singapore-based Carey Olsen Counsel Andrew Tually. “There are more than 800 million internet users – more than the US and Europe combined. Accordingly, a lot of new venture capital and private equity activity is focused on early and growthstate investments in technology, financial services, education and healthcare.”

INTERNET BUBBLE? Investment from international VCs in China’s booming internet and tech markets has grown phenomenally, supported by the country’s Greater Bay Area initiative, which sees the government positioning the Guangzhou, Shenzhen, Hong Kong region as a centre for innovation akin to what Wilkes calls “Silicon Valley Plus”. Therefore, despite declining GDP growth, global investment in the Chinese new economy reached $81bn in 2018, with its global share rising to 32% from just 4% five years ago, according to Bain, and rapidly closing in on the US at 47%. Chinese consumers have an enduring love affair with tech for convenience, happily snapping up new products and services as soon as they come to market. Mobile payments in China reached $9trn in 2016, compared with $112bn in the US. Meanwhile, China is churning out six times more computer science graduates than the US, with workers in the industry habitually putting in 72-hour weeks, claims Bain. However, valuations in the Chinese tech sector have reached stratospheric levels in recent months, with median M&A multiples of 31 times Ebitda. International venture and private equity investment have fallen sharply as a result, while managers wait on the sidelines until the market has cooled.

TRADE TENSIONS A potential internet bubble is not the only challenge that international investors face when navigating the Chinese market. There are significant geopolitical headwinds, says Ben Honeywood, Director in the private

February/March 2020 43

Words: Amy Carroll

THE CHINESE ECONOMY is at a turning point. As an engine room for global manufacturing, China’s meteoric growth over the past four decades has been driven by cheap labour costs and an explosive export market. More recently, a rising cost base and rapidly expanding middle class has driven some of that manufacturing activity overseas. And that’s created huge opportunities for businesses targeting the vast, and increasingly affluent, domestic population. Indeed, China is transitioning from high-speed to high-quality growth and the world’s private equity and venture capital firms are keen to get in on the act. Despite deepening trade tensions with the US and a slowdown in GDP expansion, foreign investment has continued to climb steadily, reaching $70.74bn in the first half of 2019, up 3% year on year. “There are these two ships moving past each other in opposite directions,” explains Paul Wilkes, Group Partner at Collas Crill. “China’s position as an engine room for global manufacturing is slowly declining as a rising cost base pushes some of that economic activity to places like Vietnam and Cambodia. At the same time, private equity has always done well focusing on companies looking to serve the middleincome market. I think that the domestic Chinese market will be the interesting opportunity for international investors over the next 15 to 20 years.” Indeed, China’s middle class is expected to represent more than two-thirds of its 1.44 billion citizens within the next decade. This makes it the largest internal market in the world. It is also the number one economy in terms of purchasing power parity. These profound demographic shifts are creating myriad opportunities across consumer sectors, from retail to real estate and from education to healthcare. “The Chinese middle class has all the aspirations and desires of middle classes everywhere,” says Mourant Hong Kong Managing Partner Paul Christopher. “Given the scale of the market, that’s creating a lot of exciting investment opportunities.” “All Chinese businesses – start-ups,






The Channel Islands and China While Chinese investors looking to target European opportunities have long turned to the Channel Islands, international money targeting Chinese opportunities has historically favoured Caribbean structures, and in particular the Cayman Islands, according to Collas Crill’s Paul Wilkes. However, the global introduction of substance requirements has brought costs in those jurisdictions more closely in line with the Channel Islands and this has created a real opportunity for both Jersey and Guernsey. Danielle McIver, Vice Chairman of the Guernsey branch of ICSA: The Governance Institute, adds that not only do the Channel Islands have a greater depth of governance expertise than some other jurisdictions, but the time zone is also more convenient than that of Caribbean jurisdictions. “And when you compare Jersey and Guernsey to jurisdictions such as Singapore and Hong Kong, distance can be an advantage,” she says. “A lot of investors don’t want to use a local structure. They prefer to be further afield. The Channel Islands also have a good reputation and a mature legal framework, which gives investors more comfort.” In particular, McIver believes that Guernsey’s protected cell company (PCC) structures have been an attractive and cost-effective option for managers and investors deploying capital into China. “While there are other jurisdictions that offer PCCs, including some in Asia itself, the legislation is not as well developed. We believe Guernsey and Jersey are ideally placed to work with international investors looking to China.”

equity group at KPMG in the Channel Islands. “Not only do you have the trade war with the US, which I suspect will get frostier before it thaws, but you also have China’s position on Hong Kong, which is not particularly internationally friendly. These practical blockers are likely to remain for some time.” An ever-changing legal environment; bureaucratic and administrative complexities; and lack of transparency, coupled with corruption and weak intellectual property rights protection

also present big hurdles for private equity and venture capital firms operating in the region. “There are certainly challenges around the ability to enforce legal rights,” says Wilkes. International players are taking a transactional rather than legal approach, he adds, structuring agreements so that there is interdependence between all parties in order to mitigate any mistrust. Furthermore, while the country’s skill base has expanded significantly, middle management remains under-developed. The Chinese State demands forced technology transfer and the environmental degradation in some areas is profound.


China continues to be a relatively untapped market. That means there is a huge number of assets ripe for private equity investment

An abundance of cheap debt is also making private equity a less attractive – or necessary – option for some investors and investee companies, according to Tually. “Another negative is that private equity targets are becoming more expensive as entire sectors are becoming more leveraged,” Tually adds. “Similarly, an abundance of foreign and local managers and domestic conglomerates with active M&A appetites means greater competition for assets.” Finally, China remains more restrictive than other major economies around protection of ‘strategic’ assets, as well as sectors that have historically

benefited from state monopolies and investments intended to profit from speculation. However, China has been committed to a programme of liberalisation since 2013 and, despite its tussles with the US, the government’s apparent willingness to embrace international investment has only accelerated over the past 12 months.

FOREIGN INVESTMENT LAW A new Foreign Investment Law came into force at the start of 2020, with the aim of putting foreign investors on an equal footing with domestic investors. In addition, the country’s Negative List – which outlines sectors of strategic interest where foreign investment is limited – was slimmed down last year. “Areas that were once restricted or prohibited have been relaxed,” explains Carey Olsen Senior Associate Susan McKinstray. “China particularly encourages foreign investment in modern agriculture, advanced manufacturing, high technology, energy conservation and environmental protection, as well as modern services. “I think we can anticipate further developments and regulatory reforms in this area. I expect the impact will be an increased competitive environment, further private equity investment, both into and out of China, and a structural update of China’s industries.” Indeed, Linklaters predicts that the Foreign Investment Law, coupled with the more limited Negative List, will herald a new era for international investment in China, potentially reaching $1.5trn in the next 10 years – triple the level seen in the past decade. “China continues to be a relatively untapped market,” says Honeywood. “That means there is a huge number of assets ripe for private equity investment at every stage of growth, every size and in almost every sector.” n

February/March 2020 45

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STRENGTHS The growing threat of security and data breaches continues to put IT teams under pressure. However, embracing a Vulnerability Management System (VMS), alongside a robust patching operation, can not only offset risk, but also demonstrate the strength of an organisation, says C5 Alliance Security Consultant Peter Lescop

2020, A NEW decade with old problems. News headlines have been highlighting more weaknesses within IT systems around the world. Cyber criminals held the currency giant Travelex to ransom, leading to staff having to use pen and paper and preventing transactions at banks and supermarkets. The British government apologised after a data breach in which a user accidentally published the addresses of more than 1,000 New Year Honours recipients online. There have also been claims that the crown prince of Saudi Arabia hacked Amazon boss Jeff Bezos’ phone. Measures are in place to protect and prevent major incidents like these from striking at the heart of organisations. Regulatory and compliance frameworks – such as the UK government’s Cyber Essentials and the Payment Card Industry Data Security Standard – require organisations to ensure that they frequently carry out tasks such as scanning, reporting and remediation of their IT systems. Businesses must ensure that their organisational security meets compliance requirements, contractual obligations and risk management standards. However, even some of the most trusted IT organisations aren’t immune. A recent patch release from Microsoft was unusually accompanied by a public warning from the US National Security Agency, to fix a flaw found within the Microsoft Windows cryptographic service. IT and security teams are being stretched to implement and run an effective patching cycle to

46 February/March 2020

keep up with these regular patch releases. Plus, they may also have to adhere to cybersecurity frameworks such as Cyber Essentials, which has a strict requirement for operating systems, firmware and application patching to be implemented within 14 days of a vendor releasing a fix for a high-risk or critical security vulnerability. This can be very challenging for many organisations’ security teams. Microsoft can simplify the process with

Our vulnerability management and patching services provide flexibility to create a scanning and remediation program to fit an organisation’s needs

operating system patching to an extent, but what about non-Microsoft products, applications, network switches, printers or firewalls? Even if a team manages to patch all of its products within the 14-day deadline, how can it be certain the patches have all been applied successfully? This is where the implementation of a Vulnerability Management System (VMS), alongside a robust patching operation, can help. A VMS provides the ability to scan and report vulnerabilities across a large array of endpoints – such as end-user devices, printers, telephony systems and network infrastructure. These vulnerabilities can range from standard operating system security patches to legacy configurations. Implementing a VMS means your teams no longer need to rely on reading security blogs to know what and when to patch. It allows them to prioritise patching based on vulnerabilities that are being actively exploited. You can leverage the research and analytics of your chosen VMS partner to fulfil this while your teams can dedicate their time to the more important task of patching. Once a VMS is in place, you need an effective way to respond and remediate any vulnerabilities. Most vulnerability management systems provide several means of achieving this, such as: ● Providing risk scoring profiles per vulnerability ● Creating tracked projects to resolve groups of vulnerabilities ● Combining your VMS with patching

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products, such as Microsoft’s System Centre Configuration Manager (SCCM), to automate your VMS and patching cycle. Once a vulnerability has been found by your VMS, you can automate the process to send a request to patch directly to the SCCM, saving time and effort.

C5 VULNERABILITY MANAGEMENT SERVICE Our vulnerability management and patching services provide flexibility to create a scanning and remediation program specifically designed to fit an organisation’s requirements. You can choose various service levels to meet your business needs and current in-house capabilities. The services are delivered by our Managed Services team using ‘best of breed’ platforms, which correlate live scan data against monitoring data for advanced threat correlation and profiling. The service provides: ● Vulnerability assessments ● Reporting and management services to businesses utilising a market leading vulnerability management platform ● The ability to identify, classify, prioritise and report on vulnerabilities that exist on networks, systems, endpoints and applications ● Reduced risk for your business and enhanced legal and regulatory compliance, with active monitoring and detailed compliance reporting for regulatory and industry frameworks. This protects your organisation’s data and systems 24/7, with an active and robust vulnerability management service. By harnessing the power of an automated vulnerability management system, organisations can ensure that they are benefiting from the security of leading-edge protection. n


Please contact for further information on how C5 Alliance can support your business or to participate in a free Proof of Value (PoV) deployment of our Vulnerability Management solution.

February/March 2020 47

Digital revolution

Rise of the

digital-savvy director A host of high-profile data breaches in recent times have raised the importance of having an infrastructure in place to understand and mitigate the risks. However, the organisations that will really thrive in the future are those led by directors who understand the wider opportunities of the new digital world – as well as the risks‌

48 February/March 2020

Words: Orlando Crowcroft

THE RECENT ATTACK by cyber criminals on foreign exchange giant Travelex, which led to the business turning off all its digital systems and returning to pen-and-paper transactions, served as a stark warning to financial businesses that the threat of data breaches looms large – and in many forms. Travelex is by no means the only organisation to fall victim to the hackers. A data breach at UK phone network TalkTalk in 2015 resulted in personal information including bank details and other data being stolen from more than 150,000 customers in a hacking attack estimated to have cost the company almost £80m. In the years since, the list of companies that have been targeted by hackers reads

like a who’s who of international firms: last year, British Airways was fined £183m for a 2018 breach that exposed 500,000 customers’ data; and Fortnite, WhatsApp and Capital One were targeted in 2019. Given the threat, it is little surprise that regulators seek to punish companies that drop the ball – the BA fine was a record – but in many cases it is the cost of fixing the damage that hits firms the hardest. TalkTalk’s fine was £400,000, the total fallout cost them £77m. “It’s not just about the fine, it’s about reputation – and putting things right,” says Mel Pardoe, Data Protection Officer at BDO in Jersey. “What cost [TalkTalk] a fortune was the mediation. They had to bring in a whole IT team, they had to get a PR team in to do damage limitation. And they will never really recover – a lot of people aren’t going to think about TalkTalk without thinking about that breach.”

GDPR IMPACT With the onset of the EU’s General Data Protection Regulation (GDPR), data protection in the UK has emerged front and centre, and the need for companies to take it seriously has been

enshrined in legislation. Under UK and Channel Islands law, Pardoe explains, data protection officers are now required to report directly to the highest level of management within a company. “The reason they’ve done that is just to raise the profile and raise the priority of data protection, because there’s no point having a data protection officer who doesn’t have access to the board,” says Pardoe. “You also can’t sack them for doing their job. They have to have a sufficient level of expertise and they have to have sufficient resource.” Such regulations have been a boon to professionals such as Pardoe, who remembers a time when data protection had been – at best – an afterthought. In the past, she recalls, boards had often slotted accountants into the DPO role, or seen data protection duties handed off to a head of administration within a firm rather than its own specific area. “I think it was seen in the past as definitely not being the priority and definitely not having the ear of the board. You might have to go through several layers,” she says. But while huge data breaches have brought data protection to the forefront in terms of public attention and media coverage, there is still an element of “that

February/March 2020 49

Digital revolution

Digital revolution

islands edge

the use of technology throughout the business, and not just at the front end, is what data transformation actually means

50 February/March 2020

would never happen to us”, says Richard Field, Dispute Resolution Partner at Appleby in Guernsey. “They look to these big names and think: ‘Well, we are a tiny little trust company.’ But it doesn’t really matter: it goes all the way from nation states getting up to no good, to a staff member who sends out an address list to the wrong group of people,” he says. Indeed, while major data breaches are being talked about at board level in the islands’ small and large firms, that may not yet have translated into an understanding of the risks. A company’s threat level, Field says, is typically always amber to red. If nobody is trying to steal from you, the only explanation is that you have nothing to steal. “The threats are evolving every week,” says Field. For Ed Shorrock, Director, and Malin Nilsson, MD, at Jersey firm Duff & Phelps, it is paramount that an appreciation of the need for digital transformation is shared by all members of the board. It isn’t as easy as simply hiring a millennial or investing in cyber security software (although these are both good ideas), it is about making sure that everyone in the upper echelons is on the same page. “All of these [data security issues] have to be lived and breathed by all members of the board. They have to be embedded in all of them,” says Nilsson. Many of the companies that the pair work with are involved in financial services, and financial services businesses still tend to be highly reliant on paper. Even

when they manage to get the paper off their desks and into online systems, there is little idea of how to manage it, Shorrock says. Many banks, financial services houses and law firms are decades old, and have a technological infrastructure that has been built piecemeal, in some cases over generations. Only the newest firms are able to start from scratch, integrating cutting edge tech in the very fibre of the company. “A lot of the large banks are still operating on a patchwork of systems,” he says.

SYSTEMS TO SIMPLIFY Meanwhile, new technology is emerging every week in the financial services space that promises to overhaul and simplify business. This ranges from software that allows clients to upload documents rather than sending them by post, to programmes that allow banks and trust companies to have real-time data on their clients, a factor that could automate some – but by no means all – aspects of due diligence. “It is the use of technology throughout the business, and not just at the front end, which is what data transformation actually means,” says Nilsson. Chris Clark, Chief Executive Officer at Prosperity 24/7, says a warning sign for him when he is debating whether to work with a client on a digital transformation project is how willing the board is not only to be involved but to evangelise it within the wider company. “It tends to be their investment in time that’s the giveaway,” he says. “It’s whether those in the executive team are making the head space for themselves and are working to put themselves forward.”

Jersey and Guernsey can lead the way on digital transformation despite being relatively small islands with a relatively limited talent pool, according to Meriel Lenfestey, a committee member of the Institute of Directors in Guernsey. Pointing to the islands’ lack of physical resources, she says: “Our future lies in virtual products and services such as money and information.” The hands-on skills don’t necessarily need to be on-island to design and build solutions, she adds, but the leadership often does. “Ultimately, if the market is there, and if our companies can effectively embrace digitalisation, the hands-on skills base will also grow,” she says.

Digital revolution

Simple automation can save time. If we can give people back 30 minutes of their day, they will get more enjoyment out of it

However, it isn’t all about the board. The businesses that are doing best in the new digital era are the ones that are investing in their workforce. It’s no good having the most up-to-date tech in the business, says Clark, if your staff are not trained to use it. And tech can help a firm give their employees back their greatest – and usually most scarce – asset: time. “People are massively overworked, massively overstretched. Stress levels are through the roof. People need to have time to do their jobs properly. Simple automation can save time. If we can give people back 30 minutes of their day, they will get more enjoyment out of it.” It is an argument Clark feels he has to make often to assuage fears that an increase in use of tech in a company leads to a corresponding lack of headcount. Of all the projects he has been involved with over the past three years, he says, not one has led to job losses. In fact, in one case, a firm recruited 100 new staff when it brought a previously outsourced technology function in house, he recalls. Clark says the message that technology doesn’t necessarily mean job losses should come from the board – a further reason for board engagement.

RECRUITMENT EDGE Being technologically savvy is also the best way to ensure firms recruit the best people. Today’s generation has a new set of work expectations, such as flexible working and the ability to work from home. That requires technological solutions, particularly where firms

52 February/March 2020

handle sensitive information. “It can be as basic as making it attractive for people to want to come and work for the company, working remotely and with flexibility around hours. That’s only possible if you have the right tech in place,” says Pardoe. Despite the increased focus on security, a new tech-savvy generation, and the ubiquity of tech in our lives, it is a source of frustration across the industry that boards so often revert to type when the going gets tough. In financial services in particular, says Shorrock, “it’s often a case of: ‘Can I see it? Can I feel it?’ That’s what happens at the board level”. Despite all the changes, across the industry, there remains the feeling that all but a few boards are still not taking the issue of technology seriously. “It is frustrating as hell. You still get people who don’t accept it,” says Clark. However, there are signs that the tide is turning, albeit slowly. “People are realising that if they are not leveraging technology, their business will die,” he adds. And the same goes for data protection, says Pardoe, with boards now realising that rather than being the exclusive domain of the tech-heads in the IT department or a DPO, it is the role of the entire company to make sure they do not become the next TalkTalk or Capital One. “Data protection can’t exist in a silo,” she says. “I can’t think of many things a board is involved with that wouldn’t involve an element of data protection. If you think of it as something separate, that’s quite dangerous – and that’s where mistakes can happen. It needs to underpin everything.” n

An upbeat outlook for 2020 There’s little doubt that uncertainty surrounding Brexit, the subsequent change in prime minister and a general election caused many buyers and sellers to postpone large fi nancial decisions last year. So what is the outlook for 2020? While that uncertainty has naturally been felt within the Jersey property market to a degree, the island’s market remained buoyant in 2019 and we are optimistic for the year ahead. Set against steady in-migration, Jersey’s mainstream residential market continues a strong run, with prices rising 8 per cent year on year, and 20 per cent since the 2008 peak. The new build apartment market is strong but most of the price growth has been seen in the family home market of three and four bedroom properties,

Geri O’Brien, director, Savills Jersey, said: “We are pleased to start 2020 in a strong position. Last year was a positive year for Savills Jersey, despite political uncertainty causing a slowdown in the market towards the end of the year. There is a sense of optimism and motivation in the air this year, largely due to decisions having been delayed in 2019. “In light of the fact that Jersey hasn’t experienced the same degree of

in the £500,000 to £1 million price bracket. There is a continuation in a shortage of stock and properties coming to the market at this level don’t tend to stay around for long. We expect that to continue and indeed grow as the year gets into its stride. Longer term, population increases will underpin growth, but affordability is increasingly squeezed.

backdrop of Brexit and general political uncertainty in the UK. This year started with a renewed sense of optimism, with a lot of buyers who registered last year ready to start viewing, and sellers keen to move forward. We have launched a wide range of properties to the market, priced from £300,000 to £9 million.

Jersey’s prime market remains resilient, with interest in the Channel Islands having increased against a

market uncertainty that affected the rest of the UK, it’s anticipated that the prospects will be even brighter for the Jersey property market in 2020. “There has been a build-up of applicant demand among those waiting for the fog of political uncertainty to clear and we anticipate increased political clarity in the UK may unlock pent-up demand this year. For those looking to buy, now is a good time if the house is right, as

although there is likely to be a wider choice of property available as we move through the spring market, there will also be increased competition for the best properties. “We would advise those looking to sell to come to the market sooner rather than later in the year, whilst demand is high. Those who sell earlier in the year will also be in the best position to secure a purchase of their own.”

Le Mistal Guide £1.5 million

Maupertuis Farm Guide £3.75 million

Cedar Valley Price on Application


Don’t make unnecessary improvements

Be prepared, don’t wait until you have buyer

Be confi dent with price, but don’t get carried away

Sellers always ask us about what they should do to their home before a viewing. Of course, people will present their property as tidily and smartly as they can. Other than that, you probably have to do less than you think.

Get your contract and legal documents sorted early. This is particularly important if you have lived at the property for some time. What may not have been an issue 10 years ago, can be more complicated now. If there are any issues about the ownership title, such as right of way, boundaries, or access, they can be sorted out at this stage.

There is certainly a more positive mood in the market, and if you price your property at the right level, you will get more interest and a better price in the long run. But remember, buyers are better informed than ever. They will pay the right price for the right house, but if you overprice your property you will struggle to get people through the door.

Most people buy a home based on location and size. Condition comes third. So, speak to an agent before spending money. We can advise you on what people are looking for and whether spending on improvements will be financially beneficial to you.

However, if you wait until you accept an offer, resolving these issues can delay the sale. Today, lenders and lawyers are far more cautious about these things. You want to stay in a strong negotiating position and not give buyers any reason to walk away.

For more information, contact Geri O’Brien at Savills Jersey on 01534 722 227.

Geri O'Brien Director Savills Jersey

Family offices

56 February/March 2020

Family offices

improving governance within

family offices

Words: Dominic Dudley

ONE OF THE big growth areas of the financial services industry in recent years has been the rise of family offices. These private wealth management firms now hold an estimated $5.9trn of assets under management, according to Campden Research, and the number of firms grew by 38% between 2017 and 2019. It’s hard to know how many have a base in the Channel Islands. Many prefer to remain under the radar and, in the case of single-family offices (SFOs), there are often very limited regulatory requirements – although multiple family offices (MFOs), which deal with the assets of several families, are subject to greater oversight. Jersey and Guernsey are keen to attract more of both, however, promising financial and political stability and an extensive range of professional services for any wanting to base themselves on either island.

As the sector expands, it is being subjected to less welcome attention too. A recent survey of family offices by Swiss bank UBS found at least 20% had been targeted by cyber security attacks, including phishing, malware and ransomware attacks. The true figure may be even higher, the report suggested – ‘Cyber operations are often covert, leaving a proportion of victims unaware of the assault on their systems’. Other governance risks are at play too, not least because family offices differ from traditional financial structures. For one thing, personality and emotion can be a bigger factor in how they are run, and every new generation that comes of age can throw up even more issues – something evident in Germany, where the battle between members of the Albrecht family, heirs to the Aldi supermarket fortune, has played out in the courts and the media. “For family offices, it all comes down to relationships with people,” says Alison Parry, Head of Private Wealth at Intertrust Guernsey. “It’s less of a business and more about family dynamics. You have people who are emotionally invested. You’re talking about money, family, business.

You’ve got personal goals as well as collective goals. There is the ability to be hugely successful or for it to go wrong; there are both extremes.” The nature of a family-run enterprise means it may also rely on more informal decision-making, with more agreed verbally and less written down. That, in turn, can make it harder to share information around. Heath Martorella, Head of Family Office at Bellerive Trust, says key governance risks and failings include “poor communication between the family office and family members and the need to educate family members on the family office’s activities”. A strong approach to dealing with many of these issues is to add a dose of formality to the proceedings – by setting out a clearly defined corporate governance structure, with statements on investment principles as well as the mission and values the family wants to pursue. However, these shouldn’t be so strict that they become a hindrance over time – something that is not always easy to get right. “Generally, we find with family offices that you need to have strong corporate governance in place that’s going to provide

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They are an increasingly prominent part of the wealth management sector, but family offices can also be secretive entities – and they face some very particular governance risks

Family offices a flexible approach so it will survive through multiple generations,” says Parry. “The governance standards provide the code under which a family interacts with each other with regards to business. The establishment of that code can be very difficult to get agreement to from the various family members. We see the problem quite a lot.” The difficulty in setting out clear rules of engagement may be the reason why so many family offices fail to do so. The UBS survey found some notable gaps, with 74% of family offices having investment

Families come in all shapes and sizes – there’s no ‘one size fits all’ approach when it comes to establishing an effective governance framework

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guidelines in place and just 54% having mission statements. No two families are the same, so there are no firm rules about the nature of a good corporate governance structure, but formulating one is almost always a good idea. “Families come in all shapes and sizes and it follows that there’s no ‘one size fits all’ approach when it comes to establishing an effective governance framework,” says James Campbell, a Partner at Ogier. “Nonetheless, early investment in an effective governance structure is likely to pay dividends. Weak governance standards can be disastrous.” Martorella agrees, adding: “The family and its family office should be aligned around a shared objective – for example, to multiply wealth, manage succession or philanthropy. A shared objective will then drive the family office’s spending rules and the investment management policy to support it. This leads to more effective, longer-term investment decisions.” Families also change over time, so an exit strategy can be a good thing. “We’ve had situations where family offices have gone for three generations and at that third generation, the decision among all parties has been to split the assets into individual ‘family offices’ for each branch of the family,” says Parry. “When you get to

that third generation, you really do need to have the flexibility to start moving it out and evolve with the future business and family strategies.”

WHEN FOUNDERS FLOUNDER Another critical element in the family business world is personnel. The initial wealth often comes from an entrepreneur building up a family business. But having the nous to establish and successfully run a company does not always mean they will also be good at running their own wealth management operation. “The classic problem for a founder is the difference between running a family business and running a family office – and not really understanding the differences,” says Geoff Cook, an independent Director based in Jersey. “The risk is that, if they’ve run a family business very successfully, they think those skills are immediately transferable and they can also run a family office successfully. “Most will probably make a fantastic contribution because they’re probably very able people, but it’d be rare for all the necessary skills to be wrapped up in one person: the legal capability, the tax advisory capability, the regulatory capability, the investment management insights, the technology knowledge. You’re not going to

Family offices wrap that up in one, two or three people.” One solution to this tripwire is to bring in a wider range of expertise, with a board including effective non-executive directors and, more broadly, a board structure in which no single voice dominates to the exclusion of others. “Increasingly these days, the more sophisticated family offices will bring independent directors onto their governance boards,” says Cook. That also makes it easier to cope when the founding patriarch or matriarch is no longer around. “The death of the founder can be a pivotal moment,” says Campbell. “If the family office has not planned for the future and interposed an effective governance framework, there may well be family discord and, with no governance framework in place, there will be no effective means by which the family can make decisions on key issues. “The consequences here can be dire – loss of investment opportunities and ultimately the family office breaking apart. Long-term forward planning is absolutely key and there needs to be an appropriate focus on succession planning.” But that’s not always an easy thing for the individual concerned to wrap their head around. “Many founders cannot envisage anyone other than themselves taking key

decisions, and simply avoid making these fundamental changes,” adds Campbell. “Likewise, many founders find it difficult to prefer one child over another.” If the leading family member can face up to such decisions, however, it will be easier for the family office as a whole to continue successfully.

ADAPTING TO CHANGE In essence, it all comes down to sensible forward planning. Adopting that principle also makes it easier to adapt to the changing demands of family members. Generations will come through with new priorities – whether that involves differing attitudes to work/life balance or a call for more ethical investments that take into account environmental and social issues. “As the younger generation comes through, it’s got different interests. It doesn’t have the same emotional connection to the origination of the wealth, because it hasn’t worked in the business that made it. That can create real tensions,” says Cook. How often things go wrong is all but impossible to know. Public rows such as the Albrechts’ bickering are rare. “By their nature, family offices, particularly SFOs, likely resolve any disputes confidentially and internally,” says Martorella.

In addition, in many jurisdictions where family offices choose to base themselves, the opportunity for people to alert the authorities or the public when things are going wrong can often be limited, not least in the Channel Islands, where there is no statutory protection for whistleblowers. “As premier international finance centres, it is an area that the islands might wish to explore at some point,” says Martorella. “However, as many family office services are provided by regulated industry providers, such as trustees, investment managers and so on, the risk of extremely serious breaches is very low, barring serious misconduct or flagrant collaboration between parties. In these situations, the ability for individuals to whistleblow – with legal protection – could act as a useful deterrent.” In the longer term, if the many unusual governance risks facing family offices can be properly managed, they have a better chance of success. “A family office with a good governance structure is much more likely to give better returns because it will be better run and better managed,” says Cook. “If you’re laissez-faire, not very organised and not very structured, you’re almost certainly going to get poorer investment returns.” n

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Once just a futuristic vision within a sci-fi movie, virtual and augmented reality have finally come of age. But can they really play a role in enhancing business performance and opportunities – and how do you know if they’re right for your organisation?

Can AR and VR really help your business? Words: Christopher Menon BUSINESSES ARE ON the cusp of the wider adoption of virtual reality (VR) and augmented reality (AR). That’s the view of Jeremy Dalton, Head of VR/AR at PwC UK and the author of a report into the business implications of such technologies, entitled Seeing is Believing. The report forecasts that VR and AR will add £62.5bn to the UK economy by 2030 – and approximately $1.5trn to the global economy. But what exactly are these technologies and can they really change the future of business? Although often clumped together during discussions about the future of tech, AR and VR are actually quite different technologies. VR immerses users

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GROWTH AREAS However, it’s over the next decade that the use of AR and VR is expected to grow exponentially. Dalton explains: “Consider the increase in the UK’s productivity from, for example, car manufacturers being able to design new vehicles faster, architects being able to visualise and design buildings more efficiently, doctors being able to improve the outcome of surgeries. All of this is possible with virtual reality and augmented reality technology. “In addition, there are other benefits that apply to organisations of all sizes in all industries – enhanced training and digital meetings, for example. Even if we assume a small impact in these areas, the collective effect would be substantial.” Contributing £44.4m to the UK economy by 2030, AR is expected to be bigger than VR (£18.1m) – not because it is a superior technology, but for the simple reason that there are a broader number of applications that apply within the real world as opposed to the virtual world.

Dalton argues that AR’s projected growth is also bolstered by the capability of the smartphones in our pockets, many of which already have the ability to run powerful AR experiences via apps. In fact, according to PwC’s analysis, by 2030, AR and VR will have boosted a number of areas’ contributions to global GDP – product and service development ($359.5bn); healthcare ($350.9bn); development and training ($294.2bn); process improvements ($275bn); and retail and consumer ($204bn). Given the size of the opportunity, how can a business assess whether such technologies are the right solution for them? Dalton believes the best way to explore whether VR or AR is an appropriate solution for a business is to run a pilot – to identify the impact and value before implementation is too established and has absorbed too much investment. He explains: “Programmes can fail for many reasons – lack of training, poor user experience, irrelevant or ineffective content, poor deployment strategy, failure to measure and iterate, inadequate funding, poor facilitation... The list goes on. VR/AR may not be the right solution to solve your particular business problem, so it’s important to run a pilot programme – and to be aware of the risks associated with implementation.” He adds that the relative infancy of these technologies – and organisations’ lack of experience in implementing them – create a number of additional challenges too: • User experience: hardware that’s complicated, bulky, and uncomfortable, and software that’s unintuitive, unresponsive and unreliable, can affect the takeup of the technology.

• Cost: hardware can be costly to procure at scale, and a large portion of cost lies within the software development realm. • Content: content created following inadequate research and consideration is unlikely to land successfully with the intended audience. • Education: partly due to a lack of firsthand experience with the technology, its true potential cannot be fully understood by most people.

EVOLVING TECHNOLOGY Regardless, Dalton is optimistic that these obstacles are being overcome. Gradually, headsets are becoming lighter, simpler and less costly, effective workshops are delivering content that hits the mark and, as the technology reaches more people, it is becoming better understood. It’s also important for any business implementing VR or AR to focus on the likely return on investment. As the PwC report explains: ‘Significant savings on training costs, a quicker time to market with new products or improved workforce productivity all have a measurable return on investment. Similarly, the chance to open up new revenue opportunities will

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in a computer-generated simulation of a 3D image or environment that can be interacted with in a seemingly real or physical way through a headset with a screen inside and gloves fitted with sensors. AR, on the other hand, overlays digital objects on the real world, creating ‘placements’ of objects in the real-world environment. An example of the former could be a set of instructions within your field of view explaining how to perform a certain task on a piece of machinery, while the latter could involve inspecting a digital life-sized jet engine on the floor of your office, which is viewable from all angles. Some organisations refer to that as ‘mixed reality’. These technologies are already creeping into business. Sectors currently using them include the gaming, retail, medical and educational sectors (see box overleaf).


case study


In the future, headsets will have the ability to move from AR to VR at the click of a button

Furniture brand Natuzzi is using Microsoft HoloLens 2 mixed reality headsets to enable its customers to see what furniture would look like in their homes before they buy it. Rather than putting users in a fully computer-generated world, as virtual reality does, HoloLens allows users to see a life-size hologram replica of a room in their house and to place a chair or sofa in it. They can then change the furniture’s colour, material and finish, walk around it, rotate it and move it to a different area in the virtual room. Natuzzi launched the service at its Tottenham Court Road store in London and plans to roll it out globally during this year. Meanwhile, new US enterprise solutions developer Tailspin creates VR training modules to improve soft skills, using ‘virtual humans’. It claims these realistic VR characters use natural language and lifelike gestures to deliver a level of emotional realism ‘unmatched by other forms of training’. One of its programmes – delivered on the Oculus Rift S headset – is used by HR professionals to help employees improve the way they handle difficult workplace scenarios, such as sacking an employee or handling difficult negotiations. In one demonstration, featuring a redundancy scenario, a virtual human named ‘Barry’ listens patiently, protests and even breaks down in tears as part of a training programme.


make an attractive case for investing in VR and AR.’ As a result, Tim McGuinness, Founder of Virtex Studios, states that VR and AR will become ubiquitous over the next few years, as software and apps proliferate. He also believes that the next inflection point for hardware will be when there are cheap headsets that can do both AR and VR, so-called XR headsets. “In the future, headsets will have the ability to move from AR to VR at the click of a button,” he says. That view was backed up by

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a survey last March of start-up founders, technology company executives, investors and consultants, conducted by law firm Perkins Coie and technology manufacturers group the XR Association. Nearly nine out of 10 respondents said that by 2025 immersive technologies, including augmented reality, virtual reality and mixed reality, would be as ubiquitous as mobile devices. So perhaps now is the time for businesses to dip a toe in the virtual and augmented waters – to begin exploring how they can benefit their operations. n

The Government of Jersey has invested heavily in digital infrastructure, with state-owned telecoms operator JT Group bringing super-fast, pure-fibre broadband to every house and business. Jersey is now ranked first in Europe and third in the world for broadband speeds, above the UK, US and Japan. In addition, the government-backed economic development agency Digital Jersey is dedicated to the growth of the digital sector. Chris Knight, the agency’s Head of Business Development, explains how this will help facilitate businesses’ use of AR and VR. “The cluster of VR and AR start-ups that has emerged in Jersey is really positive, and we’re hopeful that as awareness of VR capabilities grows, along with the advent of 5G, the likelihood is that the opportunity for the private sector to get more involved will help develop this niche further.” One company doing that is Virtex Studios, founded by Tim McGuinness. He admits that his island home has been key to the success of his AR/VR content creation business, as a result of its world-class connectivity. Virtex Studios has collaborated with Jersey Heritage in developing VR material for headsets at Jersey Museum, providing a virtual reality tour of the La Cotte de St Brelade cave. This Paleolithic site was home to some of the earliest inhabitants of Jersey, when it was still joined to mainland Europe by land. McGuinness explains: “We were capturing a local heritage site that people can’t really visit. You can’t find a better instance of where VR can solve a problem.”

Reaching the minds other publications can’t reach





Learning in the age of As machines increasingly take on many of the tasks that were traditionally used to give trainees a grounding in professional firms, some are worried that they’re missing out on valuable experience of the basics. So do the benefits of AI and automation outweigh what they’re taking away? Words: Richard Willsher

TODAY’S NEW TECHNOLOGIES are demanding that professional firms adopt different – and better – approaches to training their young talent. The time-honoured method of introducing new talent was to recruit well-educated trainees, perhaps from the ‘milk round’ of university visits and careers exhibitions, and have them ‘do their time’ working on little more than mundane roles. This would instil in them the basics of their chosen profession, upon which they would be able to build their future highflying careers. That is, if they stayed the course. The classic example is the Oxbridge graduate with ambitions of being a barrister – who would be treated as a low-paid dogsbody and expected to do the photocopying for the senior members of their chambers. Many decided this was a waste of their time and sought their fortunes elsewhere.

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Training This approach doesn’t work today for a number of reasons. As there are now fewer ‘careers for life’, there is little point to ‘timeserving’. In the so-called war for talent, and amid the need for professional firms to get the most they can from their highly paid new recruits, the sooner a trainee can start making a contribution to their employer’s prosperity, the better. What’s more, there’s no longer a need to allocate staff to the more mundane tasks often carried out by trainees, as these can be taken on by machines and other automated technology. The portmanteau term for such automation is artificial intelligence (AI). But this can embrace a variety of machine capabilities, from the application of relatively simple packets of software to highly sophisticated applications and algorithms. Some of these can not only carry out more complex tasks but, like their young human counterparts, they learn on the job – becoming more and more capable over time.

Of course, if machines can now perform the functions once performed by trainees, this raises the question of how trainees are to learn their trade and gather the skills they need. Has something been lost in the change? Perhaps, but Richard Field, a Partner in the dispute resolution team at the Guernsey office of law firm Appleby, is positive about the effect of automation. At Appleby, a software package assists with drafting documents – able to compare and contrast different documents, tasks that were typically part of a trainee’s daily work. However, Field adds that there is still some drafting that is manually carried out and, more broadly, experience still plays an important part in learning. Of course, today’s trainees have also grown up with technology – and Field adds that many come to the firm “pre-wired”. “One thing that we have been talking about with people generally, not just on the legal side but more widely across the island and in other professions and sectors, is that we are bringing on board some very tech-savvy, energised junior lawyers and trainees,” he says. “They are interested in innovation, in changing the way things have been done, because that’s the way they do things day to day themselves. They can catch up on the professional education, in law, for example, but they come to us with a good grounding in technology which benefits them and the firm.” At C5 Alliance Group, which is part of BDO in

trainees are interested in innovation, in changing the way things have been done, because that’s the way they do things day to day themselves

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HOW ARE TRAINEES TO LEARN? +44(0)7797 787425

Training Jersey and provides technology advice and consultancy across Jersey and Guernsey, John Gamble is Director of Professional Services. He says C5 trainees start off on internal projects and gain experience while working with automation, including AI. “We tend to start them off with less pressured work, so they get a feel for us, working on projects, in teams, where the client is C5 itself. They can see how project processes work and, over time, we expose them to support tickets – which provides direct client contact but means assistance can be readily provided. “We look to develop individuals around five or maybe six key axes, of which technology is only one. We do expect people to be top of their game in technology, but you can’t expect a junior to be at that stage – and technical skills are only one part of what it means to be a consultant. You also need to understand project delivery processes. “We expect people to be able to communicate. That’s crucial, either through verbal, written or presentation style. We expect people to be able to work in teams, be able to contribute to the greater goal that the team is trying to achieve, as opposed to the individual. “Finally, we expect our people, as consultants, to understand the client’s business and how best to advise them. This is gained from experience of developing technology-based solutions for multiple clients across a wide range of sectors. That doesn’t come from day one; it takes years.” Even in a technical profession, technology is only one part of the skill set. Nigel Duffy, Global AI Leader at EY, outlines the scale of its operations – but also points out the importance of interpersonal skills and teamwork. “We are increasing the proportion of new hires with STEM – science, technology, engineering and mathematics – backgrounds. Today, there are more than 45,000 EY people with technology backgrounds. AI scientists,

AI frees up bright, able, expensive humans to focus on higher-value tasks WHERE HUMAN INVOLVEMENT IS CRUCIAL

Understanding the road to artificial intelligence “RPA can be seen as the first step toward machines that truly think. We call this ‘automated intelligence’: automating manual/cognitive and routine/non-routine tasks. Another relatively early stage, ‘assisted intelligence’, involves AI that helps people perform tasks faster and better. ‘Augmented intelligence’ helps people make better decisions. In time, we are likely to see ‘autonomous intelligence’: automating decision-making processes without human intervention.” Courtesy of PwC, We, robot: Solving the RPA/human capital puzzle in financial services, 2017

mathematicians and cryptographers are among EY teams, as well as more than 20,000 data specialists. “In addition, we’ve introduced EY Badges – credentials for people with new skills such as AI, design thinking and data science. EY invested approximately $530m into training in 2019 and more than 14 million formal hours of learning were completed, on top of experiential development and structured mentoring.” But he adds: “Increasingly, interdisciplinary collaboration is the key to success. The ability to learn quickly, to communicate clearly, to collaborate effectively, and to seek and appreciate diverse perspectives – these are critical. Hard problems require effective teams – there are few hard problems that can be solved by an individual any more.”

EDUCATION, EDUCATION, EDUCATION Technology and technology-related skills are now key components of trainees’ education. So are schools adequately providing future trainees with the right skills? C5’s John Gamble is upbeat. “I think the education sector does a really great job,” he says. “There are changes afoot that are more subtle than

people might recognise. To give you an example, here in Jersey they’ve rolled out Microsoft Office 365 across many schools – providing the latest versions of Excel, Outlook, Word, PowerPoint, and so on. Plus there’s the new collaboration software in Teams and there’s the opportunity to use things like SharePoint and OneDrive. “Those are exactly the same tools that are used in businesses, so by changing education style to work with and use Office 365 is really helping us out. Once we recruit trainees, it allows us to focus on the technology they wouldn’t have had exposure to at schools and college.” People are optimistic about the benefits of AI and automation – or, as John Gamble puts it: “The point about automation is that it gives people’s time back.” In fact, it frees up bright, able and expensive humans to focus on highervalue tasks where human involvement and interaction are crucial, especially when they’re directly involved with clients. Far from fearing that trainees will lose valuable knowledge by not doing the photocopying and data entry, instead AI has become a tool for trainees to gain experience and become more effective, valuable employees. n

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Meet Pierpaolo, he’s one of three Masters of Wine here at Waitrose & Partners. He and his team spend their lives searching the planet to find the best wines for our customers. Think of them as your very own sommeliers. Because every single wine we sell has been hand-picked by them.

Pierpaolo, Partner & Head of Wine Buying


68 November 2019/January 2020


Knowledge Brain food for the busy business professional

The Knowledge is compiled by Alexander Garrett Leaders in equality


points Going public loses allure

The UK suffered a huge drop in the number of companies choosing to list on London Stock Exchange in 2019. Official data from the LSE shows that just 36 companies chose to list during the year, representing a 60% slump compared with 2018. This was also the lowest number of initial public offerings (IPOs) in London since 2009, at the depth of the financial crisis. The UK’s slowdown far outpaced the global average and Brexit uncertainty has been blamed. Stock market listings declined by 19% globally last year, according to data from EY, while across Europe as a whole, the number of IPOs was down by 46%.

Canada and France are the countries with the most equal attitudes towards women and men in leadership, according to new research from Women Political Leaders (WPL), the global network of female politicians, and insights company Kantar. The findings from the second Reykjavik Index for Leadership also show a regression in attitudes in the US and UK, while Japan, Germany and Italy have seen improvements in how equal they perceive women and men to be in leadership positions. The 2019 index has been extended to also measure Brazil, China, India and Russia. The index evaluates perceptions of who is suitable to lead across 22 different industries and public professions, researching the attitudes of more than 22,000 working-age people.

Black Friday ‘hype’

If you’re patting yourself on the back for bagging a few pre-Christmas bargains on Black Friday last year, Which? has some bad news for you. Just one in 20 Black Friday discounts are genuine, according to a study by the consumer magazine. Which? price-checked 83 items on sale on Black Friday 2018 and found that nearly all were cheaper or available for the same price at other times of the year. A De’Longhi coffee machine offered by John Lewis at £399 on Black Friday was discounted to £368 on at least 35 occasions in the following six months. And Amazon put its Echo (2nd Gen) on offer as 39% cheaper on Black Friday, when it had been cheaper on at least 13 occasions before that date. The Which? verdict: “This popular shopping event is all hype and there are few genuine discounts.”

Drugs reach new high

Europeans are spending at least €30bn on drugs each year at retail level, making the drug market a major source of income for organised crime groups in the European Union. This figure was revealed in the 2019 EU Drug Markets Report, released by the EU drugs agency (EMCDDA) and Europol. Around two-fifths of the total (39%) is spent on cannabis; 31% on cocaine; 25% on heroin; and 5% on amphetamines and MDMA. Some 25 million Europeans have used cannabis in the last year, while four million have used cocaine, according to the report, which highlights ‘the increasing importance of Europe, both as a target and drug-producing region’.

Top of the class

HEC Paris has unseated London Business School (LBS) as the top European business school in the annual composite ranking by the Financial Times. The ranking judges the overall performance of schools across their MBAs, Executive MBAs, Masters in Management and Executive Education programmes. LBS has topped the table for the previous two years, and both the UK and France are each home to six of the top 20 institutions. Many of the top French schools have been hiring deans and other senior faculty from outside France to offer significant teaching in English as well as French, says the FT — providing a draw for overseas students.

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New in… BOOKS

Maritime tigers

Measuring wellbeing

Seapower States: Maritime Culture, Continental Empires and the Conflict that Made the Modern World by Andrew Lambert (Yale University Press, £11.99, paperback) This is the gripping account of five small maritime states and how they achieved historic success out of all proportion to their size. The entities in question are Athens, Carthage, Venice, the Dutch Republic and Britain – each of which set out in ships to conquer the world. What the author identifies as the common characteristic of these maritime tigers is the dynamic, open identity that was fostered by setting out to sea, and how that made them nimbler and more adaptable than their continental rivals. Forgetting this aspect of their power is also what led to their eventual downfall, suggests Lambert.

Measuring What Counts: The Global Movement for Well-Being by Joseph E Stiglitz, Jean-Paul Fitoussi and Martine Durand (The New Press, $17.99, paperback) Nobel Prize-winning economist Stiglitz and his chums have turned their attention to wellbeing a decade after first pointing out that GDP was not the best way it could be measured. In this opus, the writers provide a dashboard of how society could more effectively measure its own wellbeing through indicators such as equality, sustainability, how good people feel about their lives and the often-hidden factors that contribute to success and prosperity. “If we want to put people first, we have to know what matters to them,” opines Stiglitz.

Tech troubles

Oil king

Uncanny Valley: A Memoir by Anna Wiener (Fourth Estate, £11.89, hardback) At 25 years old, Anna Wiener tired of her publishing job in New York and moved to San Francisco to work for a Silicon Valley data analytics start-up. At first, she felt like part of a thrilling future, but then she started to notice the inequality and casual sexism all around her. Working within a tech start-up felt like being part of a surveillance operation, and even the money seemed ill-gotten. Wiener eventually found a more comfortable niche writing about Silicon Valley for The New Yorker. This is her coming of age memoir, foretelling the end of a golden age.

Mr Five Per Cent: The many lives of Calouste Gulbenkian, the world’s richest man by Dr Jonathan Conlin (Profile Books, £12.99, paperback) Most of us have probably never heard of Gulbenkian, but when he died in 1955, he was the Bill Gates of his day – the ‘Mr Five Per Cent’ label refers to his personal share of the Middle East’s oil reserves. Gulbenkian was born in Istanbul, of Armenian extraction, and was the ultimate wheeler-dealer in a world of cartels and oil barons. Along the way, he built a spectacular art collection, including pieces filched from Russia’s State Hermitage Museum and sold on by Stalin, lived a sometimes furtive and generally promiscuous personal life, and rubbed shoulders with the international elite. He was, in short, the King of Oil.

All prices are RRP.

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The Knowledge

In numbers: MBAs RESOURCES The number of Financial Times top 10 global business schools that are in the US Source:



LinkedIn Events This new feature on Microsoft’s social network allows people to plan, announce and issue invitations to meetings and other events. It appears as a menu item in LinkedIn’s website and mobile app, and allows you to send invitations directly to everyone in your network.

The weighted annual salary of graduates from Stanford Graduate School of Business, ranked number one by the FT Source: Source:



This campaign, launched by 100 senior women in UK business and government, is pressing for equal pay in the workplace. Its website is destined to be a hub for advice and news on the issue. Former Royal Mail CEO Moya Greene is its main architect and signatories include former TalkTalk CEO Dido Harding and ex-ITV CEO Carolyn McCall.

The estimated number of MBA programmes available worldwide. Most are in English Source: FindMBA

Office Ladies Fans of The Office – well, the US version anyway – might want to catch up with a new podcast dedicated to the TV show. Office Ladies features two of the show’s stars – Jenna Fischer and Angela Kinsey – revisiting classic episodes of the cult sitcom and answering fans’ questions. It’s timed to launch some 15 years after the parody of office life made its debut on US screens. The podcast will also feature insights from The Office’s creator, Ricky Gervais.


The estimated number of people graduating with an MBA worldwide every year. The average student is 36 years old and the majority are women Source: MBA Central

Podcast Monitoring Service Launched by US firm TVEyes, this media monitoring tool makes it possible to search and monitor podcast content. Podcast Monitoring Service is a searchable spoken word index for more than 13,000 of the most popular podcasts. More than 3,000 episodes are added to it per day – an equivalent of 1,500 hours of content each day. In addition to English, podcasts are indexed in Spanish, French, Italian, German and Greek.


The average global payback time for an MBA, measured in months. The University of Strathclyde has the shortest payback time at 18 months Source: TopMBA

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How to…

…build an effective team Define the purpose Every team has to have a reason for existence, from which many of the other ingredients will flow. For example, it may be to create something, or to create improvement or change. Just ‘doing’ something is not a very aspirational purpose to have. “Providing a clear, inspiring vision sets the foundation for successful teamwork, and helps guide the direction of the group when they face challenges and decisions,” says recruitment consultancy Michael Page.

Pick the leaders “Your leaders will have such a magnifying power in your company, so be intentional about who you select,” says US journalist David Finkel, author of The Freedom Formula. Start with the people you already have on your team but be honest and realistic about their abilities. A team leader is responsible for the overall results achieved by the team, and will often act as its spokesman. But they also need to be capable of bringing together the other members as a team, so will need great communication skills. They will also set the tone, acting as a role model for more junior personnel.

“It’s important that team members know what is expected of each of them or members can’t develop mutual accountability or trust”

Set up roles and responsibilities “It’s particularly important in a team environment that team members know what is expected of each of them,” says the Massachusetts Institute of Technology’s (MIT) teambuilding guide. “Without these expectations, members can’t develop mutual accountability or trust in the team.” Meeting expectations will build that confidence in each other, while the clear definition of roles will help to avoid conflict and the duplication of effort.

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Some of the roles you might include in a team are creators, promoters, developers, organisers and controllers.

Create some rules “To be effective, teams need to be explicit about the ways they will work together,” advises MIT. “Ground rules are guidelines for specific behaviours. Teams don’t need a lot of ground rules to work together well, but everyone on the team should agree to the ground rules and share responsibility for ensuring they are followed.” These rules might cover how people interact during meetings; the need for team members to respect each other; and when people will be available.

Set goals “Once the team is established and united behind a shared, compelling purpose, the next step is to break down the vision into smaller, manageable goals and tasks,” says Michael Page. “Outline the tasks in a schedule, with agreed deadlines, milestones and responsibilities.” Now you’re in a position to review performance and look at the results. As soon as you start meeting goals, the team will gel behind a shared sense of achievement.

Communicate Good team communication generally means more communication. Make it easy for team members to communicate with each other by creating an openplan environment, ideally with a space where people can chat informally away from their workstation. But also use as many channels as possible, especially where all team members are not located in the same place. Team tools such as Slack can be especially effective

The Knowledge

Business leaders on making it to the top

Getting ahead John Clacy, Partner in charge of Deloitte, Channel Islands in oiling the wheels of communication. Create a culture in which people are encouraged to be open and honest.

Get them to bond What you’re aiming for is to create a sense of team spirit so that everyone really cares about the team and its other members. Awaydays and other activities are a great way to take people out of their normal environment and to get them to relax and learn to trust each other. Even better, unite the team around a worthy cause, such as volunteering for a local charity, and you will double the feel-good factor. At the very least, make sure there is time for some social activity between team members, whether it’s a weekly lunch or Friday night drinks.

Celebrate success Make a point of regularly recognising and celebrating success – both for the team overall and where individuals have put in outstanding performance. This will help build morale and motivate team members. That could be a personal ‘thank you’ at a team meeting, an email copied to senior managers or an annual prize-giving event. Whatever you do, recognition must be consistent and should take a form that inspires people to carry on to greater things.

When did you decide to become an accountant? After I left university. I thought the training would help me to set up my own business as I was always quite entrepreneurial and fancied myself as a bit of a Richard Branson. I joined Deloitte as an associate and I’ve never regretted it – I dread being bored or not being challenged, and that’s never happened.

How did studying experimental psychology help your career? I realised there was no such thing as scientific truth, which holds true in business. There are no black and whites, but lots of shades. Part of being a good leader is being open-minded. It’s important to receive and process all viewpoints to ensure you take all perspectives into account.

Few people stay in a firm for 25 years – what are the benefits? There have been so many benefits. My career has been interesting and varied. Deloitte has gone through many changes, and auditing through a huge transformation. These changes have provided lots of exciting opportunities and challenges along the way.

What have you gained from serving on bodies like the IoD? It’s given me a broad view both of Guernsey’s finance industry and Guernsey plc, including the challenges and opportunities of the global market. Staying with a company for 25 years, I could have become very insular, but serving on these bodies has given me a three-dimensional view that helps me to keep pace and evoke positive change.

What advice would you pass on to your younger self? Don’t support Man United! Though that changes from Saturday to Saturday. Other than that, it’s important to seek all viewpoints before making a decision – and once you’ve chosen a direction, stand by your convictions.

You love several sports – which has taught you the most? As a United supporter, I understand the importance of treating success and failure with equanimity and, if possible, grace; rugby has taught me sport can give you a lot of enjoyment without being very good at it; and I gained many rewards taking part in the Deloitte Ride Across Britain.

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Yanis Varoufakis


anis Varoufakis’ handle on Twitter reads: “Economics and recounting the events around the Greek bailout. And he has an professor, quietly writing obscure economic texts for opinion on just about everything: Brexit, the UK election, Bolivia, years, until thrust onto the public scene by Europe’s inane Julian Assange, the future of liberal democracy... handling of an inevitable crisis.” Varoufakis has become an iconic figure on the international It reveals the dry humour of a figure who cut his teeth at the left of politics, but what exactly he stands for is harder to say. University of Essex and who was, until the Greek debt crisis in During the Greek debt crisis, his message was heavily anti-Europe 2015, anything but a household name. That episode, and the in rejecting the bailout offered. And his economics have been looming threat of Grexit, catapulted Varoufakis into the described as broadly Keynesian in believing governments limelight – the leather-clad, motorbike-riding, selfcan stimulate demand through public spending, rather “He has an styled ‘erratic Marxist’ was appointed Greek finance than leaving everything to the free market. opinion on just minister as the Athens government fought to avoid He’s set out his ideas in numerous books and, about everything: being thrown out of the eurozone. among his other specialist subjects, he’s regarded as Brexit, Bolivia, the an expert on game theory, which uses mathematical Since he stepped down in July 2015, Varoufakis future of liberal has become the closest thing the world of economics models to study how people make decisions. has to a rock star. In just a few days in November, Since stepping down from Greek politics, Varoufakis democracy...” he could be found appearing at the Cambridge Union has moved onto the international stage. In 2018, one day, debating with the Financial Times’ Martin Wolf he founded the Democracy in Europe Movement 2025 another, and sharing platforms with linguist Noam Chomsky, (DiEM25), becoming closer to politicians such as Jeremy Corbyn Green Party leader Caroline Lucas, musician Brian Eno and Nobel in the UK and Bernie Sanders in the US. His affiliations may worry economist Paul Krugman. Then there’s the film Adults in the some, but in a world where populism has been in the ascendancy, Room, based on the book by Varoufakis, directed by Costa-Gavras he’s set to be a leading figure on the progressive wing of politics.

Generation Alpha If you were just getting used to Generation Z (or Centennials), then don’t blink or you’ll have missed the next cohort of consumers, Generation Alpha – their oldest members are as yet only nine years old. By definition, Gen Alpha are born between 2011 and 2025, according to sociologist Mark McCrindle, who coined the term. So their parents are Millennials, that generation of fabled entitlement and snowflake tendencies. And as they grow older, few will remember a world before Brexit and Donald Trump. Most will have some kind of digital footprint before they’re even born (ultrasounds on Instagram) and Cranfield School of Management Professor Joe Nellis says by the time they start work, many will be taking on jobs that don’t exist today. Their playmates will be artificial intelligence, virtual reality and robots and Alexa will be akin to a favourite aunt. Marketers are already grappling with how to sell to Gen Alpha, but nobody even knows what their values will be. Still, it’s a fair bet they’ll be savvier than any preceding consumers, and turning up their noses at their parents’ avocado toast.

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Blamestorming A team get-together to decide who you can dump in the do-do for your latest balls-up.

Sweep the sheds To focus on the minor details – inspired by All Blacks player Andrew Mehrtens’ description of how his teammates would tidy the dressing room after a match.




The Knowledge

Top tech Not just a smiley face


HOT BREATHE EASY Clean the air in your room with the Blueair Classic 480i air purifier. Made in Sweden, this little box swiftly removes all allergy and asthma triggers as well as other airborne pollutants. 6,899 krona, www2.blueair. com/se-en/airpurifiers/classic480i


Last October, after careful deliberation, the Unicode Consortium added 168 new emojis to the official list. They included people with red, white, curly and no hair; judges and health workers; men holding hands; people in wheelchairs; and an entertainer with green hair. It might come as a surprise that an official emojis list even exists, but it’s there for a good reason: makers of smartphones will adopt the new symbols and ensure they carry the same meaning when they are sent to a user of a different phone, so the person you’re messaging is not in receipt of a blank space or an inappropriate image. The Consortium, an organisation of Silicon Valley elders, receives thousands of proposals for new emojis each year and decides which should have the greatest priority, based largely on an agenda that is increasingly about inclusivity. Most person emojis now have to be available in a variety of skin tones and even hair styles, while gender and sexuality have also become important battlegrounds for representation.

MADE IN JAPAN Emojis were 20 years old in 2019 – the very first ones were created in 1999 by Shigetaka Kurita, an employee of the Japanese mobile company DoCoMo – and they remained a largely Japanese phenomenon until 2010, when they were picked up by Unicode and entered the global mainstream. Today, they are used by an estimated three billion people around the world; some seven billion messages a day on Facebook alone are expressed solely in emoji; and 72% of 18- to 25-year-olds have said they find it easier to express their emotions in emojis than in words. The top three most popular emojis, according

to Unicode, are the joy smiley face emoji (tearyeyed laughter), used 10% of the time; the red heart emoji, 6.6% of all emoji use; and the heart eyes smiley face emoji, used 4.2% of the time. But emojis have graduated from being mere decoration to being considered worthy of serious research and value. There’s at least one annual conference workshop devoted to emojis in San Francisco, there are academic courses on emojis (including one at the UK’s Open University), and specialist sites where you can indulge your interest for all things smiley and heart-shaped, such as Emojipedia, Emojisaurus and Emoji Dictionary – the last courtesy of the Emoji Foundation.

MARKETING MEDIUM Indeed, businesses that are not involved in selling mobile phones or social media apps are now starting to take emojis seriously, especially when it comes to marketing. The main reason is that there’s evidence that your messages, whether email, or on apps like Twitter or Instagram, are more likely to be opened if they contain an emoji in the subject heading. According to Campaign Monitor, for example, ‘56% of brands using emoji in their email subject lines had a higher unique open rate’. And those seeking to cash in on this insight have coined a name, of course: emoji marketing. But it’s not just added engagement; emojis, it is argued, will give your brand personality and help to set the tone you want to create. To get a measure of the significance of emojis, it’s been observed that they are now the most widely used language in the world – with more regular users than English, Mandarin or Spanish. Time to embrace emojis if you haven’t already.

TIME CHECK The latest Series 5 Apple Watch has one significant innovation on previous models: its screen is lit all the time so you don’t have to press any buttons. Choice of elegant face displays available. £399, com/uk/applewatch-series-5


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

Unleash the Power of Automations with Agile Automations Agile Automations specialise in developing bespoke Robotic Process Automations (RPA) and Robotic Desktop Automations (RDA), putting automation at the very heart of your organisation’s infrastructure. An organisation – where employees perform predictable, rule lead, highvolume, transactional processes and data manipulation – will boost their capabilities, increase accuracy, save money and time with RPA. Our robotics act with outstanding efficiency and accuracy, 24 hours a day, while offering enhanced Risk & Governance controls, sometimes eliminating the need for human engagement altogether. At Agile Automations, we do not use any robotics platforms, which allows us to offer a complete, yet flexible solution, for our clients; each automation is bespoke, designed to their unique individual requirements, without any need to compromise. This results in an enhanced Return on Investment. Just as we have seen robots revolutionise manufacturing – by increasing production rates, improving quality and cost savings – RPA is revolutionising the way we think about business processes. To find out how Agile Automations could automate your business, please do not hesitate to contact our CEO Martin Keelagher Email: Website: Twitter: LinkedIn: agile-automations/ Facebook: AgileAutomations/

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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:

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 Wendy Benjamin Managing Partner, Jersey Group Partner, Guernsey

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 us to discover great learning opportunities: T: 01534 873785 E :

Independent and Professional We offer a full range of management and fiduciary services to our domestic and international private clients and corporate structures: Family office - bespoke assurance 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

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)



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: Tim Cartwright – Director Lisette Le Creurer – Associate Director Wendy Warder – Associate Director Áine O’Reilly – Director Tel: 00 44 1534 870670 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. Regulated by the Jersey Financial Services Commission

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: T +44 (0)1481 727272 T +44 (0)1534 888900

Brian Siney, Founder and Director, CIPP/E, CIPM, CIPT, ISO 27K Lead Implementer, Lead Auditor, FCA +44 7797 738743 or

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Deloitte LLP provides audit, tax, consulting and financial advisory services, bringing world-class capabilities and high-quality services to clients. The company has the broadest and deepest range of skills of any global business advisory organisation and is a world leader in the professional services industry. We advise and deliver for the public sector as well as global and local businesses across every industry. Deloitte employs over 200 professionals in Jersey and Guernsey and is part of Deloitte North South Europe (NSE). The NSE firm brings together 13 countries and over 40,000 talented people, giving the firm the expertise to solve organisations’ most complex challenges and make an impact that matters. John Clacy Partner, Guernsey D: +44 1481 703 210 Jo Huxtable Partner, Guernsey D: +44 1481 703 308 Alex Adam Partner, Guernsey D: +44 1481 703 214 Martin Rowley Partner | Jersey D: +44 20 7007 7665 Siobhan Durcan Partner, Jersey D: +44 1534 82 4274 Theo Brennand Partner, Jersey D: +44 20 7303 0035

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Fiduchi is a leading independent financial services company providing solutions to high-net-worth individuals and businesses around the globe. Our independence ensures we have the flexibility to deliver bespoke solutions - that’s what makes us different! Over 25 years, our director-led teams have built long-term valued relationships with clients and their professional advisors, ensuring a pragmatic and trusted approach to their wealth structuring needs. Using the latest technological cloud-based solutions ensures we have the flexibility to deliver timely and innovative solutions that our clients require. Visit our website to see the comprehensive range of services we provide in the following areas: l Private Wealth l Corporate Services l Fund Services l Yacht Services l Employee Services For more information, visit Alternatively, you can contact: Robert Ayliffe - Executive Director Tel: +44 7700 349 750 Heidi Thompson - Executive Director Tel: +44 7797 966 408 Terry Northcott - Executive Director Tel: +44 7797 715 421 Follow us: Dubai / Jersey / London Fiduchi is regulated by the Jersey Financial Services Commission. Full legal, data and regulatory notices are published on our website. Fiduchi® is a registered trademark of Fiduchi Group Limited.

Intertrust is a global leader in providing techenabled corporate and fund solutions to clients operating and investing in the international business environment. The Company has more than 3,500 employees across 30 jurisdictions in Europe, the Americas, Asia Pacific and the Middle-East. Intertrust delivers high-quality, tailored fund, corporate, capital market and private wealth services to its clients, with a view to building long-term relationships. The Company works with global law firms and accountancy firms, multinational corporations, financial institutions, fund managers, high net worth individuals and family offices. In the Channel Islands we offer a comprehensive range of services to our clients and business partners:Corporate Services Fund Services l Real Estate Services l Capital Markets l Private Wealth l Performance & Reward Management Services l l

We pride ourselves on providing professional, personal and cross-border services to our clients across the globe, enabling businesses to grow sustainably. For further information, please contact Jacob Smed Managing Director, Jersey +44 (0) 1534 504000 Marie McNeela Managing Director, Guernsey +44 (0) 1481 211275 Intertrust Jersey is regulated by the Jersey Financial Services Commission and Intertrust Guernsey is regulated by the Guernsey Financial Services Commission. To advertise in the directory in print or online contact Carl Methven on + 44 (0)1534 615886 or

Julius Baer’s origins date back to 1890. From that time the renowned Swiss private banking group has been dedicated to serving and advising sophisticated private clients and family offices from around the world – going on 125 years now. Julius Baer employs more than 120 personnel in Guernsey and offers a full range of financial services, including discretionary portfolio management, investment advisory, structured products and credit services. There is also a dedicated team that supports the needs of External Asset Managers and the Branch works closely with the wider Julius Baer Group through the provision of administration and support services that are delivered from its booking centre.

KPMG in the Channel Islands is a leading provider of professional services, including audit, tax and advisory. With offices in Jersey and Guernsey, we employ over 260 members of staff across the two islands. We work closely with clients, helping them to identify and grasp opportunities, and mitigate risk. KPMG’s global network enables us to draw on international resources to meet clients’ needs. KPMG member firms are located across 154 countries and employ more than 200,000 people around the world. With passion and purpose, we work shoulderto-shoulder with clients, integrating innovative approaches and deep expertise to deliver real results.

Stephen Burt Branch Manager

Guernsey Neale Jehan Chairman

Jean-Luc Le Tocq Head of Private Banking

Tony Mancini Tax Partner

Craig Allen Head of Investment Management

Linda Johnson C.I. Head of Advisory

Shaun Kelling Head of External Asset Management

Jersey Andrew Quinn Managing Partner and C.I. Head of Audit Bank Julius Baer & Co Ltd, Guernsey Branch is licensed in Guernsey to provide banking and investment services and is regulated by the Guernsey Financial Services Commission.

John Riva C.I. Head of Tax Robert Kirkby Advisory Partner

Ogier provides legal advice on BVI, Cayman, Guernsey, Jersey and Luxembourg law. Our network of locations also includes Hong Kong, London, Shanghai and Tokyo. Legal services for the corporate and financial sectors form the core of the business, principally in the areas of banking and finance, corporate, investment funds, dispute resolution, private equity and private wealth. Ogier has strong practices in the areas of employee benefits and incentives, employment law, regulatory, restructuring and insolvency and property. We are a registered listing agent for The International Stock Exchange (TISE, formerly known as The Channel Islands Securities Exchange or CISE) and frequently advise companies listing on other exchanges whether offshore or onshore. We also provide pan-Island legal services for local Channel Islands businesses and individuals. Contact: Guernsey Redwood House St Julian’s Avenue St Peter Port Guernsey GY1 1WA T +44 (0)1481 721672 E Jersey 44 Esplanade St Helier Jersey Channel Islands JE4 9WG T +44 (0)1534 514000 E Website:


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Specialty: Bespoke IT Development & Business Consultancy

Building trust in society and solving important problems

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

We focus on three things at PwC in the Channel Islands: assurance, tax and advisory services. But how we use our knowledge and experience depends on what you want to achieve. So whichever one of our 390 staff in the Channel Islands you work with (or 225,000 people across the PwC global network of member firms), they’ll start by asking the following questions:

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

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Are you looking to build trust? Give your shareholders more value? Or do you want to do something completely different with your strategy? When we work with you we really listen, to understand you better. We’ll get to know you, your business and your goals. Then we’ll share what we’ve learned to help you get there. We want to deliver the value that you, our clients, our people and our communities are looking for. Talk to us about your issues and aspirations. For further information, please contact: John Roche, Partner, Guernsey Phone: +44 1481 752040 Email: Karl Hairon, Partner, Jersey Phone: +44 1534 838276 Email: Follow us: @PwC_CI

About RBC Wealth Management For more than a century, RBC Wealth Management has provided trusted advice and wealth management solutions to individuals, families and institutions. We are truly a global organisation, bringing our diverse expertise and deep knowledge to the sophisticated financial needs of our clients around the world. As one of the world’s top five largest wealth managers*, RBC Wealth Management directly serves clients globally with a full suite of banking, investment, trust and other wealth management solutions, from our key operational hubs in Canada, the United States, the British Isles, and Asia. The business also provides asset management products and services directly and through RBC and third party distributors to institutional and individual clients, through its RBC Global Asset Management business (which includes BlueBay Asset Management). For more information, please visit Contact: Phone number Tel. +44 (0) 1534 283 000 Address Gaspé House 66-72 Esplanade St. Helier, Jersey Channel Islands, JE2 3QT *Scorpio Partnership Global Private Banking KPI Benchmark 2018. In the United States, securities are offered through RBC Wealth Management, a division of RBC Capital Markets, LLC, a wholly owned subsidiary of Royal Bank of Canada. Member NYSE/FINRA/ SIPC. ® / ™ Trademark(s) of Royal Bank of Canada. Used under licence. To advertise in the directory in print or online contact Carl Methven on + 44 (0)1534 615886 or

Redcoin – Your Cyber Security is our Priority. Redcoin are a Jersey based IT Security Distributor, providing Cyber Security Solutions, Services and Support across the Channel Islands and UK markets, through our established Reseller Channels. Our objectives are to deliver guidance, education and support to the Islands businesses, to enhance their protection and understanding of the ever-changing Cyber Security Treat landscape. Our Independent security reviews are designed to give a baseline understanding of the Companies current IT position, supported by an informative and high-level report summarizing areas of strength, areas that can be improved by optimizing existing IT investment, along with key areas for consideration when planning future IT spend. Our technology portfolio provides Industry leading technologies, at an affordable cost, for all sizes and requirements of our Channel Islands clients. We can supply and support local resellers with the implementation of chosen solutions or make unbiased recommendations of other more suitable offerings outside of our portfolio. For more information please visit – or email Follow us on Linkedin – Redcoin Limited

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questions with SIMON MORGAN

Tea or coffee? Both; generally black coffee in the morning and tea after 3pm. Favourite song ever? Coldplay’s Hymn for the Weekend. I love the line ‘to make the stars come out’. Most amazing place you’ve ever visited? I’ve been very lucky to travel quite extensively, but my favourite has to be Masai Mara in Kenya – one of the best places to feed my love of photography. Second best has to be Vietnam. Scariest thing that’s ever happened to you? Stuck in between floors in a lift just a few floors from the top of the Rockefeller Centre.


Your best quality? I don’t show anger too easily. The worst thing about you? Probably the same as above. Favourite food? I do love a roast dinner with lots of gravy! Cats or dogs? Dogs. I used to have an Old English Sheepdog called Beauty. Can you play a musical instrument? No, I really have no musical talent. I did try to learn the cello when I was at school, but that did not work out well. First job you had? I suppose my first job was working in my Uncle Leuan’s shop (bless him, he’s 96 years old now and I saw him in hospital in December 2019). The shop – Len Neeves in Goodge Street, London – sold all sorts of things like pots and pans and brushes. That’s where I met David Jason, who was getting inspiration for Open All Hours. However, my first real job was as a junior administrator in the trust team at Lazard Brothers in Jersey back in 1982.



Worst job you’ve done? I really can’t think of one.

What’s at the top of your ‘bucket list’? To go back and do a safari holiday with our good friends from New York, who we met on our honeymoon (in 1990!). Favourite book? To Kill a Mockingbird – and now there’s a theatre performance of it, which I’d like to see. Sweet or savoury? Always savoury. Have you ever met anyone famous? Yes, Queen Elizabeth II, Princess Anne, David Jason, Dexter Fletcher, Brian Blessed, Prince Harry and chefs Jason Atherton, Lisa Goodwin-Allen, Michel Roux Jr and Nigel Haworth. I do love cooking! Who would you like to be stuck in a lift with? My wife, Judith. What one item would you save if your house was on fire (family excepted)? Photos – but thank goodness for the cloud. Buzzword you hate the most? Bandwidth. What do you have for breakfast? I’m trying to be good and have anything low carb, but it does mean too many eggs! Something about you that people might be surprised by? I’m not sure about being surprised by, but I’m hugely grateful to all employers, including Vistra, for allowing volunteers such as me the time to dedicate to their industry and STEP. It’s a huge part of a company’s social responsibility. Simon Morgan is Director and Head of Private Wealth at Vistra Jersey. He was recently re-elected Worldwide Chair of STEP, the global professional association for practitioners who specialise in family inheritance and succession planning.




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Global specialist in trust, corporate and fund services, with 16 offices across 13 jurisdictions. Delivering bespoke solutions to a diverse client base of high-net-worth individuals, their families, international corporations, institutional investors and business owners requiring active wealth solutions.

Cayman Islands / Guernsey / Hong Kong / Isle of Man / Jersey Luxembourg / Malta / Netherlands / New Zealand / North America Singapore / Switzerland / United Kingdom Regulatory information is detailed on

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