BL Magazine Issue 55 March/April 2018 by BL Magazine

BUSINESSLIFE

ISSUE 55 MARCH/APRIL 2018

paradise papers • GDPR diversity • INDEXATION lydia ESSA • jersey LLCs ALTernative assets and more

BUSINESSLIFE

ISSUE 55 MARCH/APRIL 2018

brexit reaches the halfway point but what does that mean for the channel islands?

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Welcome

From the ridiculous to the infuriating I’M FINDING THE whole Brexit process rather dull. The endless news reports that seem to be more speculation than news – or simply report that another meeting’s taken place where not much seems to have happened. And then there’s the constant squabbling between the UK and the EU – followed by the all-too-predictable petty bickering between the political parties in the UK. After all, if there’s one thing you can be sure of, it’s that one party will criticise another party for what they have or haven’t done. And now the big red bus has been dragged out of the garage for another ride around the block. Before the referendum, it was the Brexiters who made spurious claims about £350 million a week going back to the NHS if you voted to leave – a figure we now know to be utter hogwash. This time it’s the Remainers saying that the UK will lose £2bn a week once we leave – you can’t help but wonder how accurate that figure is too. Meanwhile, the Channel Islands are observing all of the goings-on like someone at a party watching an embarrassing relative have too much to drink, make a fool of themselves and then fall into a ditch at the end of the night. Indeed, it’s been quite interesting to watch the watchers – to see the line that Jersey and Guernsey have been treading while the UK government goes about its business, tilting at windmills. If that isn’t mixing too many metaphors. The reality, of course, is that the Channel Islands don’t have much choice but to go along for the ride, while preparing as much as they can for the outcome – having the proverbial bucket ready for their misbehaving relative. And that’s what they have been doing. Jersey, for instance, lodged a new Brexit Law in January, which will allow the States to decide which EU laws will continue to apply in the island. It also gives States Ministers powers to amend existing legislation if it’s adversely impacted by Brexit. With one year down and one to go in Brexit negotiations (or this round of talks at least), we

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thought it made perfect sense to see just where the islands stood right now, and that’s what we focus on in our cover feature this issue. Of course, while the Brexit machinations continue in Brussels, the Channel Islands must go about their business as usual. Something that was made slightly trickier before Christmas with the revelations in the Paradise Papers. Yet again, Guernsey and Jersey were lumped in by the media with every other offshore jurisdiction as facilitating tax evasion, pandering to corporations and the megarich, and generally being morally bankrupt. Those who work in the islands, and those who do business here, know exactly what the islands stand for, and the global standards by which they abide. Yet this doesn’t stop media sensationalism every time stories such as this explode into the news. Recently, I met someone for the first time, and we had the inevitable conversation about what we do for a living. Upon revealing that I edited a business magazine for the Channel Islands, the knee-jerk response was: ‘Oh, so you’re helping people avoid tax then?’. Now, I’d like to say this was the first time, but it wasn’t – it’s happened dozens of times. Without even knowing what the magazine was about, people hear the words ‘Channel Islands’ and the ‘tax haven’ bell starts ringing in their ears. It’s tedious in its predictability. And try as you might to explain to someone unfamiliar with the islands what they actually do, you’re met either with a glazed look or a pinched mouth – the ‘all rich people dodge tax’ expression. All of this begs the question: can the Channel Islands actually do something about a mass media that seems intent on tarring all offshore centres with the same brush? Or is it just a case of turning the other cheek and working more closely with people who are willing to look at the islands more objectively? We try to provide some of the answers in our feature on page 28. Enjoy your read! n

the Channel Islands are observing all the brexit goings-on like someone at a party watching an embarrassing relative have too much to drink

Nick Kirby, Editor-in-Chief, Businesslife

march/April 2018 3

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Am I ready to pass on what I treasure most? Passing on your values is as important as passing on your wealth. For some of life’s questions, you’re not alone. Together we can find an answer. Michael Clarke, Head of Private Clients UBS AG, Jersey Branch 1, IFC St Helier, Jersey JE2 3BX 01534 701148 michael.clarke@ubs.com

The value of investments can fall as well as rise. You may not get back the amount originally invested.

www.ubs.com/jersey

4 july/august 2015

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Contents

INSIDE

BL guernsey Images courtesy of VisitGuernsey

Visitor figures on the up

here was positive growth in visitor numbers in 2017, with an overall increase of departing visitors of four per cent, according to the latest figures from the States of Guernsey. This was largely driven by a five per cent increase in staying leisure visitors, the ‘value’ segment of the tourism market, with 36,264 more bed nights in commercial accommodation compared with 2016. While bad weather in Q4 2017 led to a 10 per cent dip in total departing visitors

compared with Q4 2016, the figures for 2017, excluding cruise passengers and visiting yachtsmen, increased by four per cent compared with 2016 – 10,054 more visitors than the year before. In total, staying visitor numbers increased three per cent, with a five per cent increase among those staying for leisure purposes. Visitors staying in commercial accommodation increased by four per cent, while bed nights in commercial

Funds grow year-on-year

he total value of funds business in Guernsey grew by around £20bn over the 12 months to the end of the third quarter of 2017, according to the Guernsey Financial Services Commission. At the end of September 2017, the net asset value of all funds under management and administration in Guernsey stood at £269bn – eight per cent up on September 2016. The figures also confirm two consecutive years of growth, with the net asset value of funds having grown by nearly £25bn between Q3 2015 and Q3 2016. The annual increase was largely the result of growth in the number of Guernsey-domiciled closed-ended funds, which increased by £13.7bn (8.98 per cent) over the year. Guernsey open-ended funds remained stable at £43.9bn. The value of non-Guernsey schemes – funds not domiciled in the island but with some aspect of their management, administration or custody carried out there – grew by £7.8bn (15.23 per cent) since 30 September 2016, and are valued at £59bn. Guernsey’s financial services regulator approved 10 new investment funds during Q3 – six closed-ended funds, one open-ended fund and three non-Guernsey schemes – which have contributed to a total of 982 funds currently approved for either domiciling or servicing in Guernsey. n

accommodation increased by five per cent. Business visitors also increased five per cent, although visitors staying with friends and relatives declined by four per cent. The day-visitor market saw a healthy increase of eight per cent, with a 14 per cent increase in leisure day visits versus 2016. Those on a day trip for business purposes, however, declined by 10 per cent. Whilst the number of visitors travelling by air decreased over the course of 2017 by two per cent, the number travelling by sea in 2017 grew 15 per cent compared with 2016. This was despite a difficult Q4, in which there was a 19 per cent decline on Q4 2016 due to the bad weather. The number of visitors from the UK increased by three per cent, while those from France increased by 11 per cent. The number of visitors from Jersey, however, declined by five per cent. Visiting yachtsmen increased by 23 per cent versus 2016. However, the cruise market experienced difficulties due to bad weather, with many passengers unable to disembark the ship. This led to a 17 per cent decrease on 2016. n

Locate Guernsey reports strong 2017

ocate Guernsey, the States agency that promotes the island as a place to live and work, has described 2017 as another strong year. In total, 24 relocations were made with Locate Guernsey’s help, including nine personal relocations and 15 businesses (creating 53 new jobs). The agency reports that a value of £667,000 was returned to the States of Guernsey exchequer through income tax and document duty receipts. Combined with the value of relocations in 2016, a total of £1,692,000 has been received by the States over two years. Andrew Carey, Head of Locate Guernsey, commented: “Many parts of the Guernsey business community are beneficiaries of increased economic activity. These include professional services firms such as accountancy practices, wealth managers, tax advisers, estate agencies and law firms. The hospitality and construction sectors also see spend from newcomer families and businesses.” n

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14 bl guernsey

The latest financial and business news and views from the bailiwick

BL jersey

MAGAZINE

Jersey to introduce LLCs David Postlethwaite, Technical Manager at Jersey Finance, explains why the island is working towards the introduction of limited liability companies (LLCs) and the benefits they may bring

FIRST, THE OBVIOUS – WHAT'S AN LLC? An LLC is a business structure that's very popular globally, especially in the US, where it currently accounts for over two-thirds of all new transparent business structures formed in the country each year. An LLC combines the flexibility and privacy of a partnership with the protective limited liability of a company. As a result, it has a wide variety of uses worldwide – from SMEs and holding companies to fund structuring.

WHY IS JERSEY THINKING OF INTRODUCING THEM? AREN’T THERE SUFFICIENT STRUCTURES ALREADY?

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

38 INDEXATION

55 business writing

A round-up of the latest Channel Island business news

Exchange-traded funds may be the investment du jour, but are trackers starting to create a dangerous bubble?

Why do so many businesses fail to talk to their customers in plain English?

41 alternative assets

We’ve all heard about flexible working, but is it possible for senior managers to work part-time too?

Recent key appointments for firms in Guernsey and Jersey

24 Interview

EDITOR-IN-CHIEF Nick Kirby nick.kirby@blglobal.co.uk

Lydia Essa, Director at Trust Corporation International, talks all things Guernsey

ART DIRECTOR Angela Lyons

Finance 28 paradise papers

SUB EDITOR Kate Wheal ADVERTISING sales@blglobal.co.uk NEWS AND EDITORIAL news@blglobal.co.uk GENERAL ENQUIRIES enquiries@blglobal.co.uk

In the US, LLCs are a structure of choice for alternative investment funds. US advisers and managers are familiar with LLC structures and can benefit from tax transparency for US tax purposes. Introducing the LLC into Jersey law should only strengthen the island’s position as a leading international finance centre and attract more business from US-based institutions and funds by providing a familiar vehicle.

7 News

12 Appointments CEO, CHAMELEON GROUP Carl Methven carl.methven@blglobal.co.uk

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Cryptocurrencies may have stolen the limelight recently, but cars, wine, coins and other collectibles are still an attractive proposition

business 46 GDPR

Is there anything the Channel Islands can do about the sensational press headlines?

The new data protection rules are set to land in May – our Bluffer’s Guide tells you all you need to know

32 BREXIT

50 DIVERSITY

One year in, one year to go, just where do Jersey and Guernsey stand in relation to Brexit?

Can the Channel Islands achieve diversity in the workplace or are there too many hurdles?

WHAT STAGE ARE WE AT NOW? The Government of Jersey launched a consultation on the draft Jersey LLC law, which closed on 12 January 2018. As part of the consultation process, Jersey Finance worked closely with its members to garner their responses. Those responses will now be analysed, and a revised draft of the law will be prepared.

JERSEY ALREADY HAS LLP S , SO WHY WOULD THEY WANT LLC S ? Historically, entities introduced into Jersey law tended to mirror equivalent UK structures, essentially to meet the needs of the UK or European market. The introduction of a Jersey LLC (JLLC) intends to primarily service the US market. The JLLC resembles the Jersey LLP – both can hold assets in their own name, have limited liability but can achieve tax transparency. But the proposed JLLC also offers additional flexibility over an LLP.

In fact, there may be many good reasons to choose a JLLC over an LLP, including the ability to create 'series' – akin to cells in a cell company – which may contract and hold assets individually. While the Jersey LLP is likely to remain the transparent vehicle of choice for direct investment into the UK for the US market (where LLCs aren’t readily recognised as tax transparent), it’s clear that there is a place for the new JLLC.

be extensively tailored to member requirements ● Flexible corporate governance, with the ability to appoint a manager who isn’t a member of the JLLC ● Potential for tax transparency, with a check-the-box facility to elect to be treated as a company for Jersey tax purposes ● Ability to create series, akin to cells in a protected cell company.

WHAT TYPE OF FIRMS ARE MOST LIKELY TO USE OR SET UP AS LLC S ? INDEED, FOR WHAT PURPOSE ARE THEY MOST LIKELY TO BE USED?

ARE THERE ANY DOWNSIDES?

What sets us apart from other IFCs is that the JLLC would provide a forwardthinking proposition for US-based institutions and fund managers, particularly for hedge fund structures. The most obvious use for the JLLC would be as Jersey master and feeder funds in a typical US-style master-feeder structure. A master-feeder fund is a common structure that hedge funds use to pool taxable and tax-exempt capital raised by US and overseas investors into a centralised vehicle known as a master fund. Separate investment vehicles – otherwise known as feeders – are established for each group of investors. Having a JLLC would allow for legal and structural consistency with any US entities within the structure. JLLCs may also be attractive to future investors looking for a more flexible alternative to a Jersey limited company.

WHAT ARE THE BENEFITS OF JLLC S ? Although the law is still in draft form, JLLCs are expected to offer many benefits: ● Familiarity to US clientele, with a close match to the equivalent US legal framework ● Simplified fund management for US managers through consistency with US fund concepts ● Unlike an LLP, a JLLC may be formed by a single member ● The JLLC would be governed by a private LLC agreement, which can

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58 part-time working

technology 62 instant messaging

Whilst the flexibility of the LLC would be great for UK investment, the UK hasn’t automatically recognised LLCs as tax-transparent. Although JLLCs are not aimed at the UK market for that reason, there are indications in recent UK case law that this position may change. Jersey Finance is working with industry and the Government of Jersey to ensure that the JLLC is best placed to take advantage of this shift and to ensure that JLLCs are widely accepted as tax-transparent.

WILL JLLC S BE REGULATED? It's intended that formation of a JLLC would be by registration with the Jersey Financial Services Commission. In line with other Jersey entities, JLLCs are expected to require a Jersey-regulated service provider. That service provider would be required to apply the usual standards, including the Anti Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regime. JLLCs would be expected to comply with all current disclosure requirements in relation to beneficial ownership and controllers. The raising of capital by an LLC would also require consent from the JFSC under the Control of Borrowing (Jersey) Order, 1958. WHEN WILL THEY COME INTO FORCE? The next step is for a revised draft of the JLLC law to go through a scrutiny process before being tabled for debate in the Jersey legislature later this year. n

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18 bl Jersey Jersey LLCs and a review of business developments and finance news stories

We’re used to messaging in our personal lives, but doing it at work can create a whole host of security problems

66 opinion Christopher Scholefield, Partner at Viberts, gives his view on how electric vehicles could create all sorts of planning issues in Jersey and Guernsey

The Agenda Our lifestyle section is in full bloom as spring madness makes us come over all floral

contributors The BL Global Discussion Forum

TOM HUELIN

Follow us @blglobalnews Office: Meadowlands, La Rue a la Dame, St Saviour, Jersey JE2 7NQ © Chameleon Group Limited, all rights reserved. Reproduction in whole or in part without written permission is prohibited. Views expressed by our contributors are their own and do not necessarily represent the views or policies of Chameleon Group. While every effort is made to achieve total accuracy, Chameleon Group cannot be held responsible for any errors or omissions.

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Freelance writer Tom has the unenviable task of trying to make sense of what’s happening with Brexit at the halfway point, and exactly what that might mean for Jersey and Guernsey. Lucky chap!

KIRSTEN MOREL

It’s a meaty doubleheader for Businesslife regular Kirsten, who gets to grips with the fallout from the Paradise Papers and attempts to explain GDPR for those who aren’t so technically minded.

DAVE WALLER

Business writer Dave looks at whether the Channel Islands are going to struggle to achieve workplace diversity – and why businesses need to learn how to write in plain English .

RICHARD WILLSHER

It’s all well and good that investing is becoming easier and more affordable for the person in the street, but investment writer Richard is concerned that a bubble’s forming which could spell disaster.

march/april 2018 5

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in the NEWS Follow us @blglobalnews

New committee for CIPR

William McGilivray, Business Development Director at Jersey Finance (centre), collects Jersey’s IFC of the Year award from comedian Tom Ward, host for the evening, and Marcela Kunova, Assistant Editor at Citywealth magazine

Channel Islands triumph at Citywealth Awards IT WAS A night of success for the Channel Islands at the Citywealth International Financial Centre Awards in February. There were 11 winners from the islands, and Jersey was named International Financial Centre of the Year for the sixth year running. The awards, set up seven years ago, highlight the excellence of advisers and managers in the private wealth sector within the major international financial centres. Winners and runners-up in 24 categories were announced, voted for by an international panel of practitioners from all sectors and with experience of working in all the jurisdictions covered. The full list of winners from the Channel Islands is as follows: • IFC of the Year: Jersey • Family Office of the Year: Ocorian

EasyJet announces Jersey to Edinburgh service www.blglobal.co.uk

• Private Bank of the Year, Channel Islands: Cazenove Capital • Investment Management Company of the Year, Channel Islands: Cazenove Capital • Law firm of the Year, Guernsey: Carey Olsen • Law firm of the Year, Jersey: Ogier • Boutique Law Firm of the Year: Dickinson Gleeson • Trust Company of the Year, Guernsey: Butterfield Trust • Trust Company of the Year, Jersey – Boutique: Fairway Group • Trust Company of the Year, Jersey – Large: RBC Wealth Management • Editor’s Choice Award: Victoria Yates, Ward Yates • Outstanding Individual of the Year: David Cadin, Bedell Cristin n

LOW-COST AIRLINE easyJet has started selling seats on flights from Jersey to Edinburgh. The new service is scheduled to begin on 31 March and will operate twice a week through the summer season. This will be the eighth easyJet destination connecting Jersey with the UK, and the second to Scotland – the

THE CHANNEL ISLANDS group of the Chartered Institute of Public Relations (CIPR) has a new committee, which will lead it through its 10th anniversary. Guernsey-based Mark Oliphant (pictured), Head of Communications at The International Stock Exchange Group, continues for a second annual term as Chair, and Jersey-based Natasha Egré, PR Director at The Refinery, remains as Vice-Chair. There are four new faces on the committee – Dan Gallienne from Orchard PR in Guernsey; Jersey-based Hannah Shellswell from Freedom Media; Hannah Carolan of The Partnership; and Allan Watts from Orchid. Guy Le Maistre from Exposure PR and Jim Anderson from the States of Guernsey continue as Treasurer and Secretary, respectively. Also remaining on the committee are William Church from the Jersey Royal Company; Sarah Jehan of Collas Crill; Brooke Kenyon from Orchard PR and Nichole Culverwell from Black Vanilla. n

airline already runs flights to and from Glasgow during the summer season. On behalf of Ports of Jersey, Myra Shacklady, who oversees the company’s route development programme, said: “This is a great start to 2018, which marks the 10th anniversary since the airline started services in and out of the island.” n

march/april 2018 7

News

Done Deals

Sandpiper partners with Morrisons CHANNEL ISLANDS RETAILER SandpiperCI has reached a franchise and wholesale supply agreement with UK supermarket chain Morrisons. Under the new partnership, most of Sandpiper’s Channel Island mini-supermarkets will be rebranded as Morrisons Daily stores. The stores will be supplied with Morrisons own-brand products, alongside other popular branded products. Morrisons will also supply Sandpiper with its recently revived Safeway-branded products, as well as branded products for Sandpiper’s other fascia stores. Sandpiper CEO Tony O’Neill commented: “This is a significant step-change for our food retail operation. It will be good news for local consumers – Morrisons’ scale will help us to save on our operating costs, which we can pass on to our customers by lowering food prices as each store is converted.” The 12-month store conversion programme will commence later this spring and is expected to create around 100 jobs as the business grows. n

8 march/april 2018

Offshore law firm Carey Olsen has advised SoftBank Group Corporation and its Vision Fund on the $865 million investment into construction technology startup Katerra. SoftBank Vision Fund, a Jersey-regulated structure, raised $93bn in committed capital last year and has made several technology-focused investments since its launch. Katerra constructs housing and commercial buildings using an assembly-line system to control every aspect of the design and construction process. Carey Olsen Partner Nick Bullmore, Counsel Dylan Wiltermuth and Associate Robert Coombes advised SoftBank on Cayman Islands aspects of the Katerra deal. Carey Olsen has also advised entities managed by the Carlyle Group and affiliates of Värde Partners on the A$1.2bn restructure and recapitalisation of the Bis Industries group, an Australian resources logistics and materials handling provider. The transaction, implemented via two Australian creditors’ schemes of arrangement and a subsequent recapitalisation through a partial debt-for-equity swap, allows Bis to cut its total debt from around $1.2bn to $280 million (plus $38 million of finance leases). Working with lead legal advisers Herbert Smith Freehills, the Carey Olsen team advising the senior lenders was led by Singapore-based Partner Anthony McKenzie and Associate Robert Coombes. Carey Olsen has played a central role in advising NYX Gaming Group in relation to its recommended takeover by Scientific Games Corporation. The deal, which valued NYX at Can$775 million, represented a premium of 112 per cent over the closing market price on the day before the deal was announced. NYX is a B2B real-money digital gaming and sports betting platform, incorporated in Guernsey, based in Las Vegas and listed on the TSX Venture Exchange in Canada. It includes an Alderney-incorporated subsidiary licensed by the Alderney Gambling Control Commission. The Carey Olsen team was led by Partners

Tony Lane and Tim Corfield, with assistance from Associate Jamie Oldfield and Senior Associate Tim Bamford. Collas Crill has acted for Pacific Industrial & Logistics REIT and its subsidiary Alanchoice in the acquisition of three Guernsey companies for a combined £31.5 million. Acquired from real estate investor Oxenwood YPL, the acquisition included the purchase of a portfolio of six logistics real estate assets, bringing the total value of Pacific Industrial’s investment portfolio to £125 million. Led by Senior Associate Simon Heggs, Collas Crill’s involvement included assisting Alanchoice with the due diligence process involved for each of the target companies. An Ogier team is advising events specialist UBM on the recommended takeover offer by events and publishing business Informa. Originally a media conglomerate that owned the Daily Express newspaper and a portfolio of business-to-business magazines, UBM has streamlined into an exhibitions company with operations in Europe, the US and China. The offer values UBM at £3.9bn. Led by Global Head of Corporate Simon Dinning, the Ogier team advising on the Jersey law aspects of the proposed deal includes Managing Associate Alexander Curry, Senior Associate Saraid Taylor and Associate Chloe Watson-Hill. Praxis Fund Services (PFS) has supported Guernsey-registered closedended investment company Asia Pacific Basket (ABPL) through a second rollover and fundraising. ABPL raised US$109 million through a combination of existing and new investors, and offers exposure to a range of international indices as well as regulatory protection across several jurisdictions. PFS took over administration of APBL in 2009 and administers seven similar investment vehicles in which Investec Bank, acting through its Corporate and Institutional Banking division in South Africa, acts as promoter and investment adviser. n

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News

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www.blglobal.co.uk november/december 2016 9 xxxxxx

News

MERGERS AND ACQUISITIONS

New treasurers association founded A NEW ORGANISATION, the Channel Islands Treasurers Association (CITA), has been formed to give treasurers a formal voice to engage with government, regulators and other professionals and industry bodies across the Channel Islands. As an informal group, CITA had been in discussions with the Jersey Financial Services Commission (JFSC) and Jersey Finance about the JFSC’s Consultation Paper No. 3 2017 Basel III: Liquidity Management. This led to the group voting to formally establish itself as an association. At the time of going to press, the first meeting was due to be held on 28 February, where a President and all other positions were to be established. CITA’s founding members include several pan-island companies and a Guernsey-based fund manager, though the association is looking to recruit members from fiduciaries, investment businesses, cash managers, family offices and corporate treasurers operating in the Channel Islands. The UK’s professional body of treasurers, the Association of Corporate Treasurers (ACT), was created in 1976 during a period of volatile markets and the relaxation of exchange controls. The association now has over 5,000 members, including 88 per cent of FTSE 100 companies, and it obtained Royal Charter in 2013. The newly formed CITA will initially consider similar challenges, such as the impact on interest rates and the value of sterling due to the prolonged Brexit negotiations; the rumoured reintroduction of exchange rate controls if Labour were to come back into government; and the changing position of UK banks after ringfencing. The association sees its role as complementary to other professional and industry bodies in Jersey and Guernsey, focusing on the management of cash and promoting and maintaining high standards of professional conduct among treasury functions across the islands. For more information on CITA, please contact peter.scriven@jcap.co.uk n

10 march/april 2018

The Bank of Butterfield has entered into an agreement to acquire Deutsche Bank’s banking and custody business in Jersey, Guernsey and the Cayman Islands, which provides services primarily to financial intermediaries and corporate clients. Terms of the agreement have not been disclosed. Deutsche Bank has decided to sell its banking and custody business in the islands as part of a plan to streamline its operations, and will ask its clients to transfer their banking business to Butterfield. Butterfield, which has operated in Cayman and Guernsey for more than 50 years and 45 years, respectively, says it intends to offer positions to most Deutsche Bank employees in the acquired business. The transaction is expected to close in stages during 2018, subject to regulatory approvals and other customary closing conditions. Professional services provider Equiom has announced the acquisition of corporate and fund administration business Carey SA Luxembourg. Led by Managing Director Barry Black, the team at Carey SA specialises in the incorporation and central administration of Luxembourg unregulated and regulated alternative investment vehicles, tax reporting, alternative fund services and private wealth solutions. The Luxembourg team will continue to operate from the same office, which has rebranded to Equiom. The Hatstone Group and the Folio Group are merging, subject to regulatory consent. The new group will retain the Hatstone name and will operate from the British Virgin Islands, Jersey, London, Malta, Panama and South Africa. Boutique law firm Hatstone started business in Jersey in 2011 and has offices in London, Panama and South Africa. Folio was founded in 2001 in the BVI to provide fund administration services, and has since opened

offices in Malta and Panama. It specialises in establishing and administering funds, trusts and business companies, and providing fiduciary services. Jersey-based financial services provider Ocorian has entered into a definitive agreement to purchase ABAX, an integrated advisory, corporate and business services provider based in Mauritius. The acquisition will extend Ocorian’s operations into Africa, Asia and the Middle East and increase its international team to more than 700 staff, including ABAX staff based in Côte d’Ivoire, Dubai, Mauritius, Singapore and South Africa. Expected to close by the end of March, all 275 staff employed by ABAX will join Ocorian. Ocorian has also entered into a definitive agreement to purchase Capco Trust, an independent Jerseybased private client and corporate services business. According to Ocorian, the acquisition expands its service capabilities to include expertise in all aspects of international maritime structuring. In turn, Capco’s clients will benefit from specialist financial services across more jurisdictions. All 29 staff from Capco will join Ocorian. Deloitte and Bedell Cristin acted as advisers to Ocorian. Capco was advised by Wyvern Partners and Carey Olsen. Corporate services specialist Vistra has acquired Dublin-based Squires Gilbride Chartered Accountants & Advisors. Formed in 2016 through the merger of historic businesses, Squires Gilbride offers accounting, tax, company secretarial, payroll, auditing and advisory services. It serves local and international firms looking to locate an office in Ireland. The firm is led by Partners Peter Squires, Neil Squires and Oisin Gilbride, who will remain the same under the Vistra umbrella to cement Vistra’s presence in Ireland. n

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CLIENT CENTRED DEAL FOCUSED RESULTS DRIVEN At Wyvern we are proud of our unique blend of expertise and approachability. As an independent corporate finance advisory firm, we have an enviable reputation in the fiduciary and fund administration sectors advising on over 35 completed transactions. These include arranging trade sales, acquisition searches, management buyouts and fund raisings. We advise companies, shareholders, management teams and investors. To discuss how we can support your business, please contact one of the partners below.

Mergers & Acquisi-ons Management Advisory Debt Advisory Jonathan Smith

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News

Appointments International law firm Walkers has appointed Christopher Reed as a Senior Counsel in the Investment Funds and Corporate teams in Jersey. Christopher brings a wealth of experience to Walkers, having worked on complex, high-value, cross-border transactions. He joins the firm after almost three years as a Senior Associate within the investment funds department of Mourant Ozannes in Jersey. During his career, he has also worked in the corporate departments of international law firms Latham & Watkins, Allen & Overy and Squire Sanders (now Squire Patton Boggs) in London and Moscow.

Mourant Ozannes has appointed three Partners – Carla Benest (pictured) and Stephen Alexander in Jersey and Chinyin Johnston in London. Carla joined the firm in 2007 and specialises in contentious and non-contentious employment matters, as well as relocations of businesses and HNWIs to Jersey. Stephen joined Mourant Ozannes in 2014, having qualified as a solicitor in 2004, a Cayman Islands Attorney-At-Law in 2008 and a Jersey Advocate in 2016. Chinyin joined in 2015 and is a specialist corporate finance lawyer, with experience advising on BVI and Cayman Islands law aspects of banking and finance transactions.

Digital Jersey has appointed Andrew Frith as Digital Health Special Adviser. An experienced information and technology professional in health and social care, Andrew was fundamental to the development of the island’s Digital Health Strategy, launched in January 2017 by Digital Jersey and Jersey’s Health and Social Services Department. He has spent 30 years in IT solutions in a variety of industries, often with public bodies and government agencies in the NHS, social care and education. He recently spent more than a year with the States of Jersey as a Strategic Informatics Adviser.

First Names Group has appointed Stuart Pinnington as its new Group Managing Director Corporate Services. A corporate funds lawyer by background, Stuart joins First Names from JTC, where he has served as Group Head of Corporate Services for the past four years. His career began with LG in the UK, and has included periods with Ogier, Mourant Ozannes and TMF Group, where he was Managing Director for five years. In his new role, Stuart will work with the wider leadership team and on the group’s management committee. He will be based in Jersey and will report to CEO Mark Pesco.

Financial services provider Estera has appointed David Lambotte as a Director in Jersey. As well as leading the development of the firm’s new private client business, David will help oversee client relationships across its locations. He brings more than 15 years of trustee experience in Jersey, London and the Cayman Islands to the role. David joins from Cayman, where he was Director/Head of Private Wealth Caribbean for Intertrust for almost three years. He has also worked for RBC Wealth Management in Cayman and with Dominion Fiduciary Services Group in Jersey.

Investment funds lawyer Sophie Reguengo has joined Ogier’s Jersey funds team as Counsel, specialising in investment funds and regulatory issues. Sophie brings almost 15 years’ experience as an offshore funds specialist to the company, having worked in Jersey and Hong Kong. Her practice focuses on private equity and real estate structures. She joins Ogier from Walkers, where she spent almost two years, initially as Senior Associate, Investment Funds, and latterly as Senior Counsel. Earlier in her career, Sophie spent almost 12 years with Mourant Ozannes.

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Voisin Law has promoted Kate Anderson (pictured) and Clare Nicolle to Partners. Kate, a corporate and commercial Lawyer, joined Voisin in 1998 and was sworn in as an Advocate to the Royal Court of Jersey last November. She specialises in funds law, and leads a banking team advising on large corporate borrowing transactions relating to commercial real estate groups. Clare qualified as an Advocate in 2008 and is a qualified Chartered Secretary and a member of the Jersey Family Law Association. She focuses on estate planning and contentious probate matters, and also advises on mental capacity issues.

Nigel Vooght has been named Chairman of the Collas Crill Group, overseeing the growth and governance of the firm’s seven offices. A key figure in financial services, both in the Channel Islands and internationally, Nigel has been a Partner within PwC’s financial services sector for 20 years. As its Global Financial Services Leader, he supported the doubling of the size of PwC’s practice over the past eight years. Prior to this, Nigel worked within the firm’s business recovery and insolvency practice, helping to turn around and grow companies. Nigel replaces Alex Rodger, who has been Chairman of the Collas Crill Group since 2008.

Carey Olsen has appointed Chris Griffin as a Partner in its Jersey office. Chris joined the firm as a Senior Associate in 2011, before being promoted to Counsel in 2016, and is a member of the Jersey corporate team. He advises on all aspects of corporate transactions, including legal and regulatory aspects of fund launches and other bespoke investment structures. He has played a key role in developing the firm’s digital assets practice, and recently led the team advising ARC Fiduciary on its ICO. Prior to Carey Olsen, Chris spent 10 years in the City of London as a corporate and funds lawyer for Ashurst, RAB Capital and SJ Berwin.

Katherine Hitchins has been named Head of Corporate at Guernsey law firm Babbé. Before joining Babbé, Katherine gained more than 13 years’ experience as in-house legal Counsel for investment banks in Europe and Asia, including JPMorgan Chase Bank, Asia-Pacific. Prior to JPMorgan, she was a Director for Lehman Brothers in London and held in-house Counsel roles at Rabobank and Dresdner Bank. At Babbé, she has worked on complex corporate and finance matters, including the restructuring and migration of securitisation structures and the structuring of alternative debt funding for Guernsey corporates.

Parslows has appointed Natalie Jenner as a Partner within its Jersey-based divorce and family team. Natalie also serves as Head of Family Law, Jersey Probate and Wills and Succession within Parslows. After an early career with two other Jersey law firms – Tremoceiro Advocates and Viberts – Natalie was admitted as a Jersey solicitor in 2012 and joined Parslows in September of that year. Since joining the firm, she has been involved in the divorce, civil dissolution and family law department, most recently as Head of Personal Law.

Fiduciary group Fairway has named Jerry Daly as Director and Head of Funds. Jerry joins from Credit Suisse in Zurich, where he held a consultancy role. Prior to this, he was Executive Director at MUFG Alternative Fund Services in Jersey. Jerry has worked in the offshore finance sector for more than 27 years and has a broad range of experience with investors, investment managers and intermediaries. In his new role, Jerry will be part of Fairway Group’s executive team, and will have responsibility for the strategic direction and development of the group’s funds business.

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Visitor figures on the up

Funds grow year-on-year

14 march/april 2018

Locate Guernsey reports strong 2017

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bailiwick launches investment fund

new fund, offering investment to innovators and entrepreneurial companies, has been launched in Guernsey. The Guernsey Investment Fund will invest in projects and businesses that have a Bailiwick of Guernsey focus or which may directly or indirectly benefit the development of the bailiwick. The aim is to deliver long-term capital growth to its shareholders, including the States of Guernsey, which has committed to investing up to £25 million. An independent board has been appointed to oversee the management of the Guernsey Investment Fund, each cell and its respective portfolio. Chairman Gilbert Chalk (former Chairman of Guernsey-based Aurora Russia) will be joined by John Hollis (who has been a non-States member of the Guernsey Treasury & Resources Board) and Mel Carvill, a Director of several global financial services companies. The fund, which will be managed by Ravenscroft, is likely to be made up of

protected cells, with a technology and innovation cell the first to launch. Property and infrastructure cells are also being considered. The intention is that each cell will be fully invested within five years, with an intended realisation within 10 years. MXC Advisory, a subsidiary of investment and advisory business MXC Capital, has been appointed as a consultant to Ravenscroft in relation to sourcing and managing investments for the technology and innovation cell. MXC Guernsey has committed to investing up to £5 million in the cell. Pula Investments, the family office of Ravenscroft Chairman Stephen Lansdown, has also made a commitment to the technology and innovation cell. Further fundraising will be undertaken ahead of additional cells being launched. Investments will only be made after thorough due diligence has been completed and only then with the approval of the independent board. n

D2 expands into Guernsey

ollowing the management buyout of BNP Paribas Real Estate (Jersey) last October, the recently formed D2 Real Estate has expanded into Guernsey and set up an office in St Peter Port. From its bases in both islands, D2 Real Estate provides commercial property services including property management, lettings, valuations, and landlord and tenant consultancy. The Guernsey team will be led by Matt Birch, who brings more than 20 years of commercial property experience to the role – he has spent the past five years as Director at Swoffers Commercial.

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Matt Birch (left) and Phil Dawes, Managing Director of D2 Real Estate D2 remains an alliance member of BNP Paribas Real Estate, which operates across 36 countries and has more than 180 offices worldwide. n

IoD to probe Guernsey connectivity

he Guernsey branch of the Institute of Directors is to hold its 2018 mid-term breakfast on 14 March, picking up on the topic of digital connectivity. Panellists representing the telecommunications sector and the States of Guernsey will review how Guernsey is faring in the global digital landscape. The moderator will be Elaine Gray, Partner at Carey Olsen, and the panellists include: ● J ustin Bellinger, Chief Digital Officer, Sure ● Phil Male, Non-Executive Director, JT ● Michael Byrne, Chief Executive, CICRA ●C olin Vaudin, Chief Information Officer, States of Guernsey ●L ucy Witham, Head of Digital, Economic Development Department, States of Guernsey. IoD Chair Linda Johnson commented: “Digital connectivity is a complicated topic for most of us who are nontechnical, which means we put a huge amount of trust and responsibility in those in the private sector and government who are charged with ensuring Guernsey is in the right place digitally. Our mid-term event will be an opportunity to hear from those at the cutting edge of everything digital and to question them on whether Guernsey’s digital infrastructure is fit for purpose.” The event is on Wednesday 14 March at St James, from 7.45-9.45am. Tickets can be booked through Eventbrite. n

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BL jersey Jersey to introduce LLCs David Postlethwaite, Technical Manager at Jersey Finance, explains why the island is working towards the introduction of limited liability companies (LLCs) and the benefits they may bring

WHY IS JERSEY THINKING OF INTRODUCING THEM? AREN’T THERE SUFFICIENT STRUCTURES ALREADY? In the US, LLCs are a structure of choice for alternative investment funds. US advisers and managers are familiar with LLC structures and can benefit from tax transparency for US tax purposes. Introducing the LLC into Jersey law should only strengthen the island’s position as a leading international finance centre and attract more business from US-based institutions and funds by providing a familiar vehicle.

18 march/april 2018

be extensively tailored to member requirements ●F lexible corporate governance, with the ability to appoint a manager who isn’t a member of the JLLC ●P otential for tax transparency, with a check-the-box facility to elect to be treated as a company for Jersey tax purposes ● Ability to create series, akin to cells in a protected cell company.

WHAT TYPE OF FIRMS ARE MOST LIKELY TO USE OR SET UP AS LLC S ? INDEED, FOR WHAT PURPOSE ARE THEY MOST LIKELY TO BE USED?

ARE THERE ANY DOWNSIDES?

WHEN WILL THEY COME INTO FORCE? The next step is for a revised draft of the JLLC law to go through a scrutiny process before being tabled for debate in the Jersey legislature later this year. n

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Business tendency results released

he States of Jersey has released the results of its latest quarterly Business Tendency Survey, providing qualitative information about the island’s economy. Chief executives and managing directors are asked for their opinions on the current situation of their business compared with three months earlier and their expectations for the next three months. In December 2017, the results showed: ● The headline all-sector business activity indicator was +12 percentage points (pp) – the proportion of businesses reporting an increase was 12pp greater than those reporting a decrease. ● The business activity indicator increased by 5pp over the previous three months. ● Six out of the eight current indicators were positive – only profitability and input costs were negative. ● The new business and business optimism indicators were both positive and improved from the previous quarter. ● The only indicator to change by 10pp or more was the business optimism indicator – 27 per cent of companies said their sector was more optimistic, compared with eight per cent that were less optimistic.

●T he profitability indicator was strongly positive (+31pp) for the finance sector, but negative for all other sectors, especially wholesale and retail, which had a strongly negative balance of -46pp. ●A lmost half (45 per cent) of companies reported higher input costs, producing a strongly negative indicator of -42pp. This was more pronounced for nonfinance companies, where 52 per cent saw higher costs. ●T he finance sector was significantly more positive than the non-finance sector in every indicator, and nine of the 10 indicators were more than 20pp higher for the finance sector. Looking forward, the outlook for future business activity was strongly positive, with the finance sector much more positive than other sectors. The employment outlook was positive, driven by the strongly positive finance sector, which had a balance of +57pp. The finance sector was positive about future profits and employment, with four-fifths (82 per cent) of companies expecting increased profits for 2018 and two-thirds (66 per cent) expecting to increase employment. The Business Tendency Survey report for December 2017, can be found at www.gov.je n

JFSC figures reflect NPPR increase

growing number of Jersey-registered fund managers are opting to future-proof their strategies and market into Europe through national private placement regimes (NPPRs) under the Alternative Investment Fund Managers Directive (AIFMD), according to the latest figures from the Jersey Financial Services Commission (JFSC). The JFSC reports that, as at December a total of 149 alternative investment fund managers had been authorised in Jersey to market into Europe through NPPRs – up 17 per cent on December, 2016. Over the same period, the total number of Jersey alternative investment funds being marketed into Europe through NPPRs also increased significantly to 291, representing a 15 per cent year-on-year increase. In addition, the JFSC has authorised a total of 31 depositaries in Jersey under AIFMD – a seven per cent increase over the year. Geoff Cook, CEO of Jersey Finance, said: “We're continuing to work together with the fund management communities both in and outside of the EU, so it's pleasing to see such a strong uptake of Jersey's tried-and-tested private placement regime. Five years on since AIFMD was introduced, it's a route that's proven to work, providing alternative managers with a clear, effective and future-proof means of accessing EU investor capital.” n

20 march/april 2018

Jersey registers data protection legislation

ersey's Royal Court has registered new data protection legislation that will strengthen individuals’ rights and enable island businesses to continue accessing international markets. The registration of the Data Protection (Jersey) Law 2018 and Data Protection Authority (Jersey) Law 2018 follows recent Privy Council approval. The laws will come into effect on 25 May to coincide with the introduction of the General Data Protection Regulation. The new laws were agreed unanimously by the States Assembly earlier this year and will enable data to continue moving freely between Jersey and the European Union. The States of Jersey says this will benefit trade and help law enforcement agencies cooperate with their counterparts in other jurisdictions. The Assistant Chief Minister, Senator Paul Routier, said: “This is an important milestone for Jersey. The new data protection regime will bolster the rights of islanders, ensure equivalence with the EU and further our standing as a trusted place to do business.” n

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JFSC issues statement on initial coin offerings

he Jersey Financial Services Commission (JFSC) has issued a statement to clarify the regulatory treatment of certain initial coin offerings (ICOs) and to ensure that the public are fully aware of the role of the JFSC in respect of such ventures. In its statement the JFSC said: ‘Most jurisdictions don’t regulate ICOs. However, like any other Jersey company raising capital through the issuance of shares, a Jersey company issuing digital coins or tokens from [the island] would need to obtain a consent – Control of Borrowing (Jersey) Order 1958 (COBO) – from the JFSC to set up the company. ‘The grounds on which the JFSC would determine whether or not to grant a consent under these circumstances is limited by statute, and the focus is on whether potential investors have been given sufficient information about the company and the risks of investing in it. ‘The JFSC does not consider the financial standing of, or conduct risks associated with, the unregulated company selling such ICOs or the digital coins/tokens.’

In November 2017, the JFSC issued a risk warning, explaining that ICOs, from wherever they are issued, tend to be unregulated. It warned the public about the risks of ‘investing’ in them. When asked to give an Article 2 consent under COBO with the aim of enhancing transparency for investors who are making a decision on whether to invest in an ICO offering, the JFSC would consider attaching conditions to any consent granted, with every application considered on a case-by-case basis. One condition is that marketing material produced by the Jersey company must contain clear consumer warnings highlighting that the ICO is unregulated and may result in substantial risks for investors. In particular, the consumer warnings must clearly state that: (a) ICOs are a highly speculative form of investment (b) Investors should be prepared for the possibility of losing their investment completely (c) This form of investment is not subject to existing capital market regulations. n

JBA forms next-gen advisory committee

he Jersey Bankers’ Association (JBA) has formed a next-generation advisory committee, known as JBA 2.0. Comprising 15 future banking leaders from 12 member banks, JBA 2.0 offers generational diversity to the main JBA committee, to help ensure sustainable and forward-looking industry engagement across a range of legislative, regulatory and policy initiatives. JBA 2.0 will work on number of contemporary research projects including fintech and banking innovation, financial inclusion, and banking careers of the future. Each member of JBA 2.0 has also been paired with a member of the main committee to create mentoring partnerships that will develop the industry’s talent while broadening leadership viewpoints. Following its inaugural meeting in January, Emiko Caerlewy-Smith, the creator of JBA 2.0 and current Vice President of the JBA, said: “JBA 2.0 gives future leaders of Jersey’s banking sector the opportunity to shape the industry they are set to inherit. The main JBA committee looks forward to benefiting from its ideas and perspectives.” n

22 march/april 2018

Minister lodges Brexit law

he first step in a series of Brexit-related measures has been taken by the States of Jersey. A draft law laying the foundation for the changes Jersey will need to make as a result of Brexit was lodged by the Minister for External Relations, Senator Sir Philip Bailhache (pictured), in late January. The European Union Repeal and Amendment Law will enable the States to swiftly implement changes to local legislation and ensure a smooth transition to Jersey's new relationship with the EU. The law allows the States to decide which EU legislation will continue to apply in Jersey. It also gives the States Assembly the ability to grant Ministers powers to correct deficiencies in the island's law caused by Brexit, without having to bring the matter before the full Assembly. These powers are expressly limited so that they can’t be used to impose or increase taxation, create serious criminal offences or interfere with human rights legislation. Senator Bailhache commented: “It is crucial that the government and the States Assembly are equipped to make the necessary corrections to Jersey law to ensure a smooth transition for the island from its current relationship with the EU to its new relationship in March 2019. “The States Assembly can make regulations and Ministers can make orders much more quickly than laws can be enacted. If we attempted to make all the necessary changes without these powers, the volume of laws required would lead to a procedural traffic jam for the government, States Assembly and Privy Council. “We are taking a substantially different approach to the UK in bringing this draft law. Whilst the UK is implementing all existing EU legislation that applies to it in one law, we are creating the ability for the island to select which EU legislation it wishes to keep. “Law officers and government departments are working to identify pieces of legislation that are essential to ensure the island's relationship with the EU operates properly when Protocol 3 falls away on Brexit day.” The draft law was set to be debated by the States Assembly on 6 March. n

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Interview

london private client lawyer Lydia Essa moved to Guernsey in 2016 and became a director at Trust Corporation International last year. She told Businesslife what drew her to the island and why it appeals to clients from around the world

How did you get to where you are now? Having studied law at university, I trained as a solicitor with Allen & Overy in London and qualified into the private client team there. Later, I joined the private wealth boutique firm Maurice Turnor Gardner, a ‘spin-off’ of Allen & Overy’s then private client team. I practised as a trust lawyer throughout my legal career, specialising in the design and administration of asset-holding structures for UK and international clients. The majority of my time was spent advising trustees generally on the legal, practical and tax issues affecting them and I had a particular interest in contentious trusts and probate matters and family disharmony. So, I found I’d built a skillset that was likely to be complementary to a career as an offshore fiduciary and, in the event, the transition from adviser to trustee was relatively painless. I’m not advising clients any more, but I do rely on my trust law expertise and my legal skills on a daily basis. Why did you choose Guernsey? I had 12 years or so in private practice, so I’d managed to establish a good network of relationships in the Channel Islands, and Guernsey in particular. I’d got to a stage where I was ready to leave London life behind, as was my husband, and I was confident that I would be able to do good work with good clients and highly skilled peers in Guernsey at the same time as eliminating the dreaded daily commute. Also, Guernsey is a very special place to raise my children, and it’s sufficiently connected to the UK that I don’t ever feel too homesick. Looking at private wealth and trusts in general, what sort of trends are you seeing? On a macro level, there’s obviously a significant focus on transparency, disclosure, compliance and regulation. There have been so many legislative and regulatory changes in the EU, the UK, the US and the Channel Islands – FATCA, CRS, beneficial ownership registers, the UK Register of Trusts, the requirement to correct, GDPR, to name but a few. We’re in a period of transition now. It’s

24 march/april 2018

an educational process for all of us – fiduciaries, clients and advisers alike. From my perspective, one knock-on effect of these changes is an increased need for internal resource and, in turn, an increased cost base for service providers. This is translating into higher fees for clients and, ultimately, a slimmer private wealth industry. There’s been a great deal of consolidation among fiduciary and corporate service providers. One result of that is there are relatively few private manager-owned fiduciary businesses such as Trust Corporation – most fiduciaries are private-equity backed. The industry really does have a different profile now. And how is this being felt ‘on the ground’? As far as I can see, fewer new, low-value structures (in relative terms) are being established. That said, the work is there, structures are being established, but the driver is often traditional planning – wealth preservation and/or succession planning – rather than tax mitigation. The work is generally more complex, higher value, and there’s more competition for the work, especially on fees. It’s probably fair to say there’s more need than ever for fiduciaries to be highly skilled – this has prompted

there’s more need than ever for fiduciaries to be highly skilled – this has prompted many to jump out of private practice into the fiduciary world

many, me included, to jump out of private practice into the fiduciary world. As for Guernsey specifically, there’s obviously consolidation – there’s less choice than before for clients when it comes to fiduciaries and corporate service providers. But there has been an improvement in terms of consistency of quality and the application of the regulatory framework within which we operate. There’s a risk that certain jurisdictions may struggle to weather the storm that’s been created by the raft of changes put in place within a relatively short period. But, to my mind, Guernsey is well-placed to cope with the shift towards regulation and transparency and information exchange. In fact, none of these things are new to Guernsey. The island’s general approach to regulation, accompanied by the sophistication of its service providers and advisers, has always played a role in its appeal. There’s definitely been a ‘flight to quality’ – there are jurisdictions that simply don’t have the resources or the skillset to cope with where we find ourselves at the moment and Guernsey has been able to capitalise on this. On a slightly separate note, I think the new work we’re doing here in Guernsey is less UK-focused than ever. There’s been an overhaul of the UK taxation of trusts regime which has, for quite understandable reasons, precipitated a rationalisation exercise. Clients with lower-value structures (or structures holding UK property) have been undertaking cost-benefit analyses. And sometimes they’re making the decision to collapse the structures, either because the tax costs are so penal and/or the levels of fees associated with increased regulation and compliance are such that the structures simply don’t justify their existence any longer. You mentioned increased costs and regulation. Do clients accept this is part and parcel of modern wealth planning? The clients we work with want to know they’re in a safe pair of hands if they come to Guernsey. A considerable amount of the work that I’ve been doing since arriving on the island has been connected with taking on and regularising existing structures at the request of clients. It’s

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▼

Words: Nick Kirby Pictures: Etienne Laine

Interview

The

interview Lydia Essa www.blglobal.co.uk

march/april 2018 25

Interview a generalisation, but clients seem to be increasingly mindful of the need to work with sensible jurisdictions, with professionals who understand the legal and regulatory framework. They really do want to minimise the scope for non-compliance and any inaccurate or unnecessary reporting – they want to get it right. So, what other concerns do clients have right now? Uncertainty regarding Brexit was always going to be unhelpful. Before the referendum, Guernsey’s position was, on balance, a favourable one – it sat comfortably in a Customs Union with the EU without the full responsibilities of EU membership. Now we find ourselves in a position where it’s all quite unclear and we’ll be tagging along with the UK when the way forward is agreed. In practice, however, I think it’s largely been business as usual for Guernsey and our clients since the Brexit vote – any impact that we’ve felt has been indirect and, at most, there’s been a slight lack of confidence on the part of our clients. We also do a great deal work with USconnected clients and, until recently, there seems to have been a sense of ‘let’s wait and see how the Trump regime plays out’. The US hasn’t signed up to CRS, so arguably it’s become more attractive to clients who are keen to minimise information exchange. There have also been a number of favourable domestic tax changes introduced recently – and the economy is doing relatively well, so some are viewing the US as a relatively safe harbour and a decent investment hub. There are, however, clearly those who are still worried about what the future might hold, so are still undertaking planning abroad and are keen to hold funds outside of the US. The general rule is that during unsettled times, the industry will see an increased interest and appetite for wealth planning and asset preservation. Clients are generally

Clients seem to need more reassurance than ever that we’re doing everything we can to guard their information

26 march/april 2018

information exchange and transparency are fundamental to what we do and they’re accepting of it, but what they won’t do is tolerate leaks of confidential information – and why should they? What should Guernsey be doing to strengthen its position in private wealth? Thankfully, the island’s legislative and regulatory frameworks are kept under review and refined regularly. As a jurisdiction, we’ve got an excellent ‘toolkit’ and we’re able to establish and administer flexible yet robust structures that can be as simple or complex as necessary, depending on a client’s objectives, against the background of a well-established and sophisticated legal system. In my view, Guernsey is certainly able to hold its own compared with our rival jurisdictions.

FACT FILE Name: Lydia Essa Age: 37 Position: Director, Trust Corporation International Married to: Andrew Children: Angus (2) and Georgina (1) Hobbies: Reading, walking my dog and spending time with my friends and family Interesting fact: I rowed a lot at university. I’m neither a ‘morning person’ (which is a must if you’re a rower) nor particularly sporty, so even I’m surprised that I took it relatively seriously for three years.

keen to protect what they already have, so the uncertainty on various fronts is just focusing minds on these things. What’s your view on the Panama and Paradise Papers? Have they damaged the Channel Islands’ reputations? Personally, I can’t see any measurable damage yet. The most recent episode in particular, however, does seem to have shifted priorities and altered the conversations that we’re having with our clients. It’s clear how much and how quickly privacy has moved up the agenda for them – as in the fundamental human right to privacy rather than a desire to be non-compliant or withhold information that should be properly shared or exchanged. Clients seem to need more comfort and reassurance than ever that we’re doing everything we can to guard their information. They understand that

On that note, how do you see private wealth playing out in Guernsey over the next 24 months? As already mentioned, there’s likely to be far more competition for the best work, but that work will be more complex, higher value, and will ultimately need to be really well advised. Frankly, fewer organisations are likely to be well placed to take it on. There will continue to be a concerted focus on reputation, compliance and transparency, and all global reporting frameworks that have been introduced in recent years will have to become firmly entrenched in what we do. We’re quite likely to see a shift in terms of jurisdictional focus away from the UK and Europe and definitely increased scrutiny of the use of tax planning vehicles and structuring. From what I understand, the world of trusts and estate litigation is as active as ever as wealth is transferred across generations, and, sadly, beneficiaries continue to fall out with their families and/or their trustees. On a more positive note, philanthropy seems to be coming up more in the conversations we have with our clients and a number of extremely high-value philanthropic structures have been established recently on the island, which is promising. The family office space also seems to be thriving. To my mind, the fundamentals of what we do as an industry – preserving family wealth and family businesses, ensuring family harmony, promoting good family and corporate governance, promoting sensible succession planning – these fundamentals are unlikely to change. As an industry and a jurisdiction, we need to continue to adapt as the world around us evolves, but essentially to keep on doing what we’re doing and doing it well. n NICK KIRBY is Editor-in-Chief of Businesslife

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Finance

Paradise Papers: Can the Channel Islands beat the headlines?

The Paradise Papers led to Jersey and Guernsey being branded in the media, once again, as dubious tax havens. So has the time come to stop fighting skewed press representation?

The Paradise Papers – as it happened

2017

24 October: Appleby announces that it is being investigated by the International Consortium of Investigative Journalists (ICIJ) and invites concerned clients to contact the firm.

5 November: Paradise Papers are published for the first time in a globally coordinated media effort that includes the BBC and the Guardian in the UK, Germany’s Süddeutsche Zeitung (the original receiving publication that shared the stolen documents with the ICIJ) and the New York Times. In total, 381 journalists from 96 media organisations in 67 countries took part in the analysis and publication of the documents.

20 October: First mention of the Paradise Papers appears on internet forum platform Reddit.

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Words: Kirsten Morel IF YOU’D WANTED to avoid media coverage of the Paradise Papers in November last year, you’d have been best off borrowing Elon Musk’s Falcon Heavy rocket and heading off to Mars. Global media coordination ensured the whole world knew about documents that were stolen from law firm Appleby and corporate service providers Estera and Asiaciti Trust, well in advance of their actual publication. Once the light had been shone on the cache of 13.4 million documents that

5 November: News of Queen Elizabeth II’s investments in a Cayman Islands fund is revealed as one of the lead stories.

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contained the names of 120,000 people and companies, it didn’t stop shining for weeks. The media circus that surrounded the Paradise Papers was partly due to the revelations in the Panama Papers that were published in April 2016. That initial dump of 11.5 million documents from law firm Mossack Fonseca caused a worldwide furore and led to the toppling of the Icelandic Prime Minister. It also highlighted the use of offshore financial centres by the likes of Marine Le Pen, David Cameron’s father and several people linked to Vladimir Putin, among many thousands of other individuals. Like the Panama Papers before them, the justification for publishing so many confidential documents in the Paradise

Papers was supposedly ‘public interest’. Yet there have been few allegations of criminality and very few penalties paid by those named, except for the Chairman of Angola’s Sovereign Wealth Fund, who was fired after his name appeared in the cache. Despite this, the fact that names such as Queen Elizabeth II, Prince Charles, US Commerce Secretary Wilbur Ross, Apple, Glencore and Nike have all appeared, has led to accusations of hypocrisy from the media and public, who maintain they’re tired of the wealthy avoiding payment of their fair share of taxation. Appleby, it must be said, isn’t taking the matter lying down and has launched legal actions against both the BBC and the Guardian, claiming that publication of the

8 November: A story about Guernsey-based private equity firm Terra Firma emerges, accusing the company of forcing a care home operator that it owns to take a $220 million loan on unfavourable terms.

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Finance

Finance papers wasn’t in the public interest. “In terms of those mentioned in the papers, there haven’t been any further developments because nothing actionable has been exposed,” says Dominic Wheatley, CEO of Guernsey Finance. “The only action has been Appleby’s against the BBC and the Guardian, which is important because it’s about the balance between public interest and confidentiality.”

Jersey and Guernsey are seen as guilty by association – in most people’s minds there’s very little difference between one international finance centre and another

Image credits: Shutterstock.com

ABOVE REPROACH The lack of actionable information has extended to the Channel Islands, where it’s likely that sighs of relief were heard once the papers had been published. Even though a link to US tech giant Apple was found, it turned out to be something of a damp squib. “In respect of Jersey, the confidential data that was published had little relevance to the island,” says Geoff Cook, CEO of Jersey Finance. “The one issue to generate media interest was the claim that Apple had redirected some of its profits through Jersey, although there was no suggestion that anything improper had occurred. “Our regulator, the Jersey Financial Services Commission, was able to confirm that the two Apple subsidiaries weren’t Jersey-registered companies. And their understanding was that Apple funds relating to these entities haven’t been remitted or held in the island. “To make clear our position, Jersey doesn’t condone abusive tax avoidance schemes, and we would fully expect that, should the government or regulator find any evidence of this sort of activity, action would be taken.” Given the lack of criminality contained within the Paradise Papers and the action taken by Appleby, it’s clear that such disclosures do damage the Channel Islands’ reputations, even when they’re not directly involved. This leads some to conclude that a new approach to communication is needed. “There’s always going to be interest in wealth and money, and that’s the price we pay for working with successful people. But there’s a conflict,” says Tim Morgan, Partner in Mourant Ozannes’ funds team. “Not all disclosures are necessarily useful, and there’s a need to protect individual privacy, but you can

19 December: Appleby launches legal action against the BBC and the Guardian, claiming that the leaks are a breach of confidence and demanding a halt to further publication and the return of stolen documents.

understand the hunger for greater transparency. There’s a legitimate expectation that because of the history of financial services, we have to continue to lead on the way we communicate our work.”

LOST AMID THE CROWD The need to clearly communicate the nature of the islands’ financial services industries and the differences between them and other jurisdictions is well understood. The islands make a considerable effort to encourage this differentiation and to concentrate minds on the positives they bring to international finance, trade and commerce. Yet Appleby’s own experience when engaging with journalists and publishers before the publication of the Paradise Papers suggests that the perceived strength of a story will always be placed above consideration for the islands’ reputations. “We thoroughly and vigorously investigated the allegations and we were satisfied that there was no evidence of any wrongdoing, either on the part of ourselves or our clients,” explains Mike O’Connell, Global Managing Partner at Appleby. “Despite this and a willingness to engage with journalists, it was disappointing that numerous media outlets chose to use confidential and often privileged information to publish stories. “It’s grossly unacceptable that these journalists have been so cavalier when it comes to plundering

19 December: Labour Party leader Jeremy Corbyn (pictured) criticises Appleby’s legal action.

2018

21 December: A human rights group in Switzerland lodges an official criminal complaint against resources conglomerate Glencore with the Swiss Attorney General. The complaint requires the AG to investigate Glencore’s acquisition of a copper mine in the Democratic Republic of Congo.

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11 January: José Filomeno Dos Santos, head of Angola’s sovereign wealth fund is sacked by the country’s president after he is shown, via the Paradise Papers, to have appointed a friend to manage the fund.

15 January: Australia’s tax office says that the Paradise Papers reveal the ‘commoditisation’ of tax avoidance.

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Finance documentation with total disregard to issues of confidentiality, privacy and privilege.” The Channel Islands may not have been named a great deal within the Paradise Papers, but there’s still a feeling that Jersey and Guernsey are seen as guilty by association – after all, in most people’s minds there’s very little difference between one international finance centre and another. This quandary has led Dominic Wheatley to suggest that it’s time for the islands to position themselves differently. “The Channel Islands are unusual in that we have an environment that’s quality driven and at the forefront of global standards,” he says. “If we did have the capability of rebranding ourselves away from finance and towards professional services, it would be a positive move to make, but we’re at the mercy of others’ perceptions.”

LACK OF BALANCE Those ‘others’ include larger jurisdictions that have an interest in seeing the spotlight continue to shine on the small islands. “There’s a lot of self-interest from jurisdictions that may want to use these stories for their own benefit,” says Tim Morgan. “There’s an interest in the EU to move business from London to other EU centres, and that’s clearly continuing.” The recent publication of the EU blacklist of uncooperative jurisdictions also had a grey list that included Jersey and Guernsey. But tellingly, the EU focused only on third countries and so avoided the inclusion of EU member states. As a result, Ireland, Luxembourg, the Netherlands and Malta all avoided the reputational damage that comes with such publication, lending credibility to Morgan’s opinion of the EU’s self-interest. Clearly, size matters and small jurisdictions will always find it difficult to have their voices heard in the public domain, but that doesn’t mean the Channel Islands should change tack, says Mike O’Connell. “The only way we can educate people on the work undertaken in the Channel Islands is by continuing to lead by example by being cooperative and tax-transparent jurisdictions. “We have a huge number of people working in the finance industries in Jersey and Guernsey who can talk

proudly to their family and friends about the work they are undertaking, but media reports will continue to circle with a degree of negativity around the word ‘offshore’. We need to continue to do what’s right and lawful. We also need to continue to communicate what sets us apart from other IFCs.” From Jersey Finance’s perspective, this means talking about the benefits the islands bring to international trade and finance. “Around £160bn of pension fund assets from all over the world are housed in Jersey, benefiting more than 60 million people by helping to generate better returns for their retirement pot,” says Geoff Cook. “Jersey also helps facilitate £500bn of foreign investment into the UK and almost €200bn in the rest of the EU each year, supporting hundreds of thousands of jobs that otherwise wouldn’t exist. “These are statistics that people, especially politicians and other key influencers, can appreciate. But we want to build on that. So our strategy this year is to extend our message as widely as we can to the general public, and to show that by working with partners in business and wider global communities, together everyone benefits.” Whether another set of revelations will follow the Panama and Paradise Papers is uncertain, but the finance sector – or whatever new name can be created for it – is too important to the Channel Islands to be ground down by media sensationalism. Guernsey and Jersey’s financial services sectors have changed enormously over the past 30 years and both will continue to communicate positive messages about their role in the global financial system. It’s hard to tell whether these will be heard by the general public, but by ensuring they reach the ears of politicians, the islands hope to limit the damage done by the Panama, Paradise or any other papers in the future. n KIRSTEN MOREL is a freelance finance journalist

23 January: The Guardian publishes a story claiming the Paradise Papers show that Appleby ‘provided offshore services to a bank [FBME Bank] accused of facilitating terrorist financing, transnational organised crime and the Syrian government’s chemical weapons programme’. The story claims that services were provided ‘for at least a year after the US Treasury published an extraordinary roster of allegations against the bank, and acted as its agent for more than a decade beforehand’.

28 January: It’s revealed that Dan Gertler, the intermediary linked with the Glencore acquisition of a Congolese mining company, is under investigation by the US Department of Justice for alleged bribery of ‘high ranking’ Congolese government officials.

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8 February: EU Parliament votes to launch an enquiry into the use of offshore jurisdictions to avoid payment of VAT by multinational corporations. The enquiry is expected to focus on jurisdictions linked to the UK.

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Finance

Brexit reaches the

halfway

point One year down and one year to go, how are the Channel Islands preparing for the UK leaving the EU? and whatâ&#x20AC;&#x2122;s the impact likely to be?

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Finance

WELL, WE’RE HALFWAY there. Having triggered Article 50 in March 2017, the UK is now just 12 months away from actually leaving the European Union. At 11pm on Friday 29 March 2019, Big Ben will toll to mark ‘Brexit’… if the bells are back in service by then. Actually, that’s not entirely accurate. What will happen in March 2019 is that a two-year transitional period for the UK to properly exit the EU will begin. For that to happen, a withdrawal treaty and transition deal must first be ratified by EU nations and the UK government. So, between now and March 2019, politicians will be frantically discussing issues such as whether the UK has to remain within the Customs Union and the single market during the transition period. And only when the transition deal is ratified can discussions on the UK’s post-Brexit position actually begin. What’s been agreed already are the terms of the UK’s ‘divorce settlement'. There are three key elements here – there will be no hard border between Northern Ireland and the Republic; the rights of UK citizens in the EU, and vice versa, will be protected; and the UK will pay between £35bn and £39bn to leave. Obviously, the Brexit negotiations are massive, and it would be easy to accuse the government of making a bit of a meal of it

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CHANNEL ISLAND REACTION In the Channel Islands, industries and politicians are keeping a close eye on progress. In January, Sir Philip Bailhache, Jersey’s Minister for External Relations, lodged a new Brexit law, which will allow the States to decide which EU legislation will continue to apply in Jersey. It also gives States Ministers powers to amend existing legislation, if it’s adversely affected by Brexit. “This draft law is the essential first step in the legal measures that Jersey will need

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all. David Davis, the Secretary of State for Exiting the European Union, looks as if he’s aged about 100 years since the negotiations began. But this is the biggest constitutional change the UK has faced since the Second World War. Negotiations were always going to be tough. “The government’s done a better job at making progress on some of the key withdrawal issues, and moving the discussion on to getting a political deal on transition by the end of March this year,” says Allie Renison, Head of Europe & Trade Policy at the Institute of Directors. “However, we’re in real need of much more clarity about government objectives for the long-term end-state relationship with the EU.”

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Finance to implement as a result of Brexit,” says Senator Bailhache. “We’re taking a substantially different approach to the UK in bringing this draft law. Whilst the UK is implementing all existing EU legislation that applies to it in one law, we’re creating the ability for the island to carefully select which pieces of EU legislation it wishes to keep.” The States of Guernsey has taken similar steps. In November 2017, the ‘Protecting the interests of the Bailiwick of Guernsey as the UK leaves the EU’ policy letter was passed, giving Ministers similar powers as their Jersey counterparts when reacting to Brexit-related law changes.

A QUESTION OF FINANCE From a regulatory and political perspective then, it would appear that the islands are well placed. But what of their biggest contributing industry, finance? “I can’t imagine huge change for financial services, because they’ve always traded as a third country with Europe,” Allie Renison explains. “The Channel Islands are early voluntary adopters of a lot of EU financial services regulation, which may be how the UK also approaches life outside the single market for financial services after Brexit.” And people are still attracted to the islands as a place to do business. As James Gaudin, Corporate Partner at Appleby in Jersey, points out: “We’ve seen strong deal flow, particularly US clients coming to the Crown Dependencies looking to execute trades. They’re suddenly thinking: ‘The islands are pretty well established, there’s good infrastructure, there’s good ancillary services. There’s good substance – why don't we base something here?’. “Fintech is another area where we’re seeing good deal flow – West Coast US businesses looking to establish their technology outposts here. You look at

This is the biggest constitutional change the UK has faced since the Second World War. Negotiations were always going to be tough

the infrastructure and that’s what’s attracting them – it’s not really the taxplanning scenario.” It’s too early to tell, of course, but is there a sense that Brexit could actually be a good thing for the islands? “We are, and always will be, a complementary asset to London City plc,” says Andy Sloan, Acting Director of Strategy at Guernsey Finance. “Yes, you’ve got huge uncertainty. Yes, you’ve got those tectonic plates both in

London and Brussels. But what you have in the Channel Islands is a lot of security and stability. You have a jurisdiction that conforms to the development of international standards, is seen as well regulated, and can strategically assist the UK in its pivot to the rest of the world.” In December 2017, the States of Jersey published its Brexit Business Survey, which was completed by local businesses from financial and non-financial backgrounds. Two-thirds of respondents thought the overall impact of Brexit on their business would be neither positive nor negative, while only six per cent felt Brexit could lead to businesses considering a move away from the islands – a view echoed by Appleby’s Gaudin. “There’s always potential – we’re in constant competition with other countries, on and offshore. But my feeling is Brexit will be beneficial to a jurisdiction like Jersey, and others, which are ‘substance’ jurisdictions.” And what of claims the islands could push for independence from the UK? “I guess, never say never,” Gaudin continues. “But it seems like a bridge too far to me.” This will be a massive year in the Brexit discussions. By the end of 2018, we’ll know a lot more about how the transitional period will work, and maybe even what sort of Brexit the UK will get. In the Channel Islands, there’s a sense that business and government are as prepared as they can be for March 2019 and beyond. “Uncertainty creates opportunities,” Sloan says. “For us, it’s about maintaining our position as a secure jurisdiction offering sophisticated, specialist services. It’s about getting the message across that we bring trillions of capital into the UK, and help the UK pivot to the rest of the world in its trading activity.” n TOM HUELIN is a freelance writer

Brexit at the coal face While financial services companies seem positive on Brexit, those in the tourism, hospitality and agriculture sectors aren’t so optimistic. As Mark Crowther, CEO of Liberation Group, says: “The impact on UK business from Brexit will roll down to the Channel Islands. Certainly, a lot of our wine suppliers are very concerned about getting stock into the UK. What they don’t want is lots of paperwork and bureaucracy, with stock getting tied up at Dover and Calais. There are also issues like import tariffs. What’s going to be lumped onto a bottle of French wine, for example?” While freedom of movement issues seem to have been appeased by the Brexit divorce bill, the flow of people from Eastern Europe to the Channel Islands for work seems to have slowed. “If you’re coming from Romania or Hungary, you can go and work in Germany or France and immediately earn 15 per cent more than you’d earn over here, with the devaluation of the pound against the euro,” Crowther continues. It’s enough to turn one to drink, isn’t it. “But you know what?” Crowther concludes, defiantly. “Business people get their heads down and get on with it. Pubs will still be trading and we’ll still be selling beer.”

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Advertising feature

Creating the right employee pension plan Tania Bearryman, Head of Performance & Reward Management at Intertrust, examines a number of key factors that companies should consider when implementing an employee pension plan

INTERTRUST HAS RECENTLY gone out to tender for the provision of trustee, administration and investment management services for its employee pension plan. It has been a fascinating process that has highlighted some of the primary considerations around choosing the right providers for your employee pension. The first requirement is to go back to basics and consider the purpose of a pension plan and who will benefit from it in the long run. For us, it’s about getting the accumulation of assets right, so that our employees’ retirement aspirations can be met. This is such a simple statement, but one that has so many complex considerations along the way.

choice of investment in their pension plan is staggering. The choice of investment options for accumulating wealth for retirement is the most important decision facing any employer or trustee – and then the employee has to make a selection from the choices presented. There seems to be a broad spectrum of options, but the decision in choosing the ‘right’ one is sometimes driven by the wrong parameters. There’s also some confusion around who is responsible for the investment selection process. Employers can be seen

EMPLOYEE BUY-IN What proportion of employees opt to take up a pension? This is the first hurdle for anyone in realising their retirement dreams – you have to be in it to win it. Employee communication and education is key, as we live in a world that pulls young employees away from saving for their retirement. The big picture suggests government support will only reduce over time. The population in many advanced economies is ageing and the drain on social security funds will reach a tipping point, so saving for retirement from an early age is vital and is just the first step to being comfortable once you stop working.

INVESTMENT CHOICES The mountain of regulation, guidance and legal precedent surrounding the trustee and employer responsibilities towards the

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The mountain of regulation, guidance and legal precedent surrounding the choice of investment in a pension plan is staggering

to be responsible where an insurance product is chosen, but where the pension is in a trust solution, the trustee is responsible. The trustee isn’t usually qualified or regulated to provide investment advice to members, and the plans are structured so that members make their own choices from the investment options available. The trustee remains responsible, however, for ensuring the investment options remain appropriate; selecting the investment manager; monitoring the performance of the investment manager; and ensuring that the members have sufficient information to make an informed decision. In determining what investment choices would be appropriate for our employee pension, the primary criteria were: ● The majority of employees are inexperienced in making investment decisions. ● A financial planning tool would assist members in understanding their own investment risk-and-return parameters. Following that analysis, it would guide them to an investment selection that would meet their needs. ● We were clear the right investment choice would be the solution that delivered the best, consistent returns net of all fees. Low fees weren’t a driver in our decision, rather the most well-managed returns (risk vs volatility) after fees were deducted. ● We wanted an investment manager that offered a range of solutions to meet the needs of members at different stages of their career. We needed growth and capital preservation options as well as a balanced option suitable for a wide range of employees.

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Advertising feature

PASSIVE VS ACTIVE FUND MANAGEMENT This represents the age-old debate that continues in cycles year after year. Our economy has experienced an unprecedented 10-year bull market. Tracker funds with a passive allocation to the indices that they track have done very well. In bull markets they do well, in bear markets they do badly, and there’s no way of limiting the downside because they’re forced to hold shares in the companies that make up the index that they track. In sustained bull markets, it’s difficult to beat the index and, over time, the average investment manager has been proven to fall short. However, there are managers who do beat the indices, and in times of market downturn, it’s these managers who effectively manage the downside risk presented by the index. A good pension should cater for all members of the fund – those nearing retirement, those just starting their career and those who have built up a carefully nurtured pot but still have 20 years to retirement. Managing downside risk protects everyone and having the right options to meet the full demographic of members is equally important.

INVESTMENT MANAGEMENT FEES In making our selection, we were faced with the full range of self-select, passive index trackers, all the way through to some of the most sophisticated manager selection processes and discretionary management solutions available. At the passive tracker and self-select fund end of the spectrum, the most important factor that we were asked to

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consider was how cost-effective the solution would be, considering how higher fees would mount up over the life of a pension saver’s membership when compared with the low-cost solution afforded by tracker funds. The aim, however, is to amass wealth, not just save costs. So the key must lie in performance net of fees and not just the fees themselves.

INVESTMENT ADVICE Another consideration is the profile of the employees. Our average employee age is relatively young – they have little or no investment experience or qualifications. Even those who are part way through or nearing retirement often have no investment experience. How, then, are employees expected to decide which funds to choose in a self-select fund offering? A brief discussion with an investment adviser who focuses on basic risk-versusreturn questions is important, but it doesn’t overlay fund performance against expected returns and the quality of risk taken by one fund manager compared with another. What we want is for employees to take responsibility for their retirement savings, to understand the risks and returns involved and what impact those factors will have on the amount they will be able to retire on. This is a very different approach to discussing risk and return, with a more informed and involved decision being made.

THE SOLUTION The solution for our employee pension plan brings together personal pension advice

for members with financial modelling tools that map their anticipated retirement income expectations to their level of savings and anticipated investment returns. By turning the decision-making on its head, we’re encouraging members to carefully consider their retirement income needs and then map the resultant expected income to the level of their pension contributions and investment risk appetite. Our solution offers an investment strategy that works to achieve a given return within specified risk parameters without the need for members to switch between funds. By tying the investment solution into the financial modelling process, the investment strategy selected is made in an informed way within clear parameters that are easy to understand. There’s no need for a lifestyle investment option because the financial modelling is repeated regularly and is available to members to return to when their circumstances change. With these significant benefits, we hope to encourage even greater participation in our employee pension and encourage employees to start saving from a young age. n

FIND OUT MORE

To learn more about Intertrust’s trustee, administration and investment management services for international retirement savings plans and Channel Island corporate and personal pension plans, please contact Tania Bearryman, Head of Performance & Reward Management, on +44 (0)1534 504000.

march/april 2018 37

Finance

Words: Richard Willsher

The explosive growth in exchange-traded funds has highlighted the investment opportunities offered by tracking indices. But some experts are concerned that a dangerous bubble might be forming

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GO BACK 10 years and the only people who’d have heard of exchange-traded funds (ETFs) would be those who really knew their investing onions. That’s not the case these days. With the rise of robo-advisers and passive investing, today an increasing number of investors are familiar with what ETFs do – in many cases, simply tracking an index of one kind or another. Right now, ETFs represent a relatively small proportion of global assets under management (AUM). In its report last year, Global Asset Management 2017: The Innovator’s Advantage, The Boston Consulting Group calculated the total value of global AUM in 2016 at just over US$69trn. This includes all actively managed funds and passive ones such as ETFs and trackers. In January this year, specialist ETF and exchangetraded products (ETP) consultancy ETFGI calculated that assets invested in ETPs listed globally reached a new high of $4.83trn during 2017 – a mere seven per cent of the total. What’s significant about this number, however, is that it represents a 36 per cent increase on a year earlier. Globally, ETFGI reckons that there are now in excess of 5,300 ETPs traded across different markets. And it’s a trend that looks set to continue. Moody’s Investors Service has calculated that by 2024, passive investments in the US, including ETFs and other indexed funds, will overtake actively managed ones. What’s more, even within actively managed portfolios, investment managers may also employ ETFs to provide their investors with exposure to

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certain assets. This could be to the largest listed companies through one of the major indices or, say, emerging market stocks via an index such as MSCI’s Emerging Market Index.

TRADITION AND INNOVATION The indices, and the companies that construct and maintain them – such as S&P, FTSE or MSCI – wield huge influence over the investments we make. The S&P 500, for instance, is the world’s most followed single stock market index, with $7.5trn of AUM benchmarked to it. S&P also offers an extensive range of other indices. MSCI reports that $10trn of AUM is benchmarked to its family of indices. FTSE Russell, part of the London Stock Exchange Group, also reports that $10trn is benchmarked to its products. However, this isn’t the whole story. There is now a growing number of businesses that compile indices – 191 separate firms, according to a database maintained by ETFGI. Some are familiar names in the finance world – Bloomberg, Markit or STOXX. Others are stock exchanges around the world and banks such as Deutsche Bank, Credit Suisse or Citigroup. Then there are those that are relatively new, but which are making their names as providers of specialist indices – including ScientificBeta, Solactive and Horizon Kinetics. The more you look, the more it becomes clear just how diverse the index universe is becoming. Frankfurtbased Solactive’s founder and CEO Steffen Scheuble says: “We believe that globally there are 20 indices that are very hard to replace due to their branding

power. Everything beyond that is our market – and in this space, we believe that the competition will increase significantly.” The key is choosing an area of specialisation and developing the programming tools to gather real-time market information to formulate a credible basket index whose story will appeal to investors. For example, while the S&P 500, the Dow Jones Industrial Average, the FTSE 100 and others are stock market indices, Bloomberg specialises in bond market indices. Solactive is an index provider and calculation agent for more than 260 ETFs globally and accounts for around five per cent of all ETFs. Its indices include, among others, commodity-related ones such as its London Gold Price and its Silver Futures indices. It also compiles indices that track futures and derivative instruments. These are themselves constructed on the back of the price movements and outlooks of underlying assets such as bonds, equities or commodities traded in various markets. Another approach to indices is so-called ‘thematics’ investing. This involves selecting particular stocks from the wider market and constructing an index upon them, excluding all others. This gives the investor exposure to specific themes. STOXX, for example, offers its iSTOXX FactSet Ageing Population Index. This tracks firms from around the world that target their goods and services to older people, such as healthcare firms, insurance companies and goods companies. From the same family, the iSTOXX Global Women Leadership Select 30 Index ‘systematically selects stocks from the STOXX Global 1800 Index that have

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Finance a relatively high proportion of women at board level, while maximising overall dividend yield and minimising overall volatility of the derived index’. And yes, if there’s an area of the investment world that’s riven with market jargon and technical terminology, index investing is up with the leaders. The term ‘smart beta index’ is used to describe indices such as these that aim to provide investors with lower risks and better returns by cleverly selecting index components. The future of indexation, believes Steve Berkley, Global Head of Indices at Bloomberg, may lie in the hands of data providers. He cites Bloomberg’s ability to draw on its massive information bank and computing power. “Where once banks played a much greater role in providing index information to their clients, now firms like ours are democratising the indexation data and sharing data with a much larger range of people,” he says. “They’ll be able to create customised indices by accessing historical data by themselves. “In the past, it was only the most advanced organisations that were able to manipulate data and come up with different types on analyses. We’re working towards enabling smart people, with good ideas to play, to come up with new investment products.”

BUBBLE TROUBLE? However, while the rapid growth of ETPs is grabbing the limelight, below the surface, the success of index investment may contain the ingredients for self-harm. Leaving aside the question of whether investors fully understand the risks of investing in some of the more esoteric index-related products, market concentration risk could become

Tracking terms It used to be so simple. Index tracking, for most people, meant investing in a fund that tracked, say, the 100 leading shares listed on the London Stock Exchange – the FTSE 100. Or maybe the largest companies in the US, the S&P 500. Today, there’s a huge range of trackers to choose from. Here are just some of them: Bond/fixed income An index that follows the prices of selected bonds issued by governments, municipalities, corporates, mortgage-backed securities and other debt instruments. Commodities These indices track the price of commodities – such as gold, silver, oil and natural gas. Equities The traditional index tracker that follows a range of shares quoted on a particular stock market.

Exchange-traded products are attractive because they’re easy to buy and sell and because they involve minimal human intervention

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Leveraged index Using derivatives and a lending multiple, leverage is used to increase the return available from investing in an underlying index. Shorting an index Because index tracking ETFs are quoted on public markets, they can be bought, sold, borrowed or shorted as any other stock. An ETF that’s expected to fall in value is borrowed from, say, an institution, and sold. It’s then bought back at a lower price and returned to the lender of the ETF, minus a borrowing fee. The profit is retained by the shorting investor.

significant. For example, investors in an S&P 500 tracker fund or ETF would invest in, among others, Alphabet (Google), Amazon, Apple, Facebook and Microsoft – the world’s five largest companies by capitalisation. Investors in other funds of the world’s largest businesses would also do so. As might those investing in specialist indices of major technology stocks. And those investing in so-called ‘momentum’ funds, which invest in companies that are basically going great guns and which fund managers think will continue to do so. Add such drivers together, quite apart from actual company performance and news flow, and it’s easy to see that prices for certain chosen stocks could become hugely inflated. No surprise then that on 27 October last year, CNBC reported that these five stocks had gained close on $900bn in the previous year. Moreover, the news channel reported, these stocks had been the top contributors to the S&P 500’s 15 per cent gain in 2017. But what will happen when confidence ebbs? How will it be when the algorithms that both shape and follow global trading and investment patterns determine that upside limits have been reached? What’s to stop selling activity accelerating as rapidly as buying had previously done? At least there’s some good news for ETF investors. As these trade on exchanges in the same way as individual stocks, they are liquid. Investors smart enough to feel a cold draught on their portfolios can sell quickly. Those investing in mutual funds with daily reporting or hedge funds with lock-in periods may well not be so fortunate – so too Johnny-come-lately investors and institutions that pick up on trends too late in the day. In summary then, index investing enables investors to easily buy exposure to markets, specific sectors, asset types and trends. ETPs are attractive because they’re easy to buy and sell and because they involve minimal human intervention. They’re low cost as compared with other active and passive funds. But they’re not immune to market forces. And their exponential growth feeds off of the markets they help to drive higher. The growth of regulation and increased transparency will almost certainly continue to drive investors away from high-cost traditional investment managers and towards ETPs in the coming months and years. However, in July last year, the UK’s financial industry regulator, the Financial Conduct Authority, decided against taking immediate action on ETFs, but intends to keep a ‘very close watch’ on them. But then, some regulators do have a history of chasing after horses that have long-since bolted. n RICHARD WILLSHER is a freelance finance writer

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alternatives: moving into the fast lane While stock markets and Bitcoin have been stealing the investing headlines, alternative assets have been quietly going about their business. But are they about to step back into the spotlight?

SHORTLY AFTER THE financial crisis of 2008/09, certain alternative assets (or collectibles) – wine, classic cars, art and coins – were talked about as viable alternatives to more traditional options as safer, long-term investments. However, as global stock markets have recovered, such talk has become less common. Indeed, the picture for alternatives seems a little mixed – a Da Vinci painting was sold for a record US$450 million in November 2017; while in the same month, Stanley Gibbons’ investment arm based in Guernsey went into administration. Some alternative investments do appear to have performed strongly over the long term. The Knight Frank Luxury Investment Index (KFLII) regularly pulls together performance data on various alternative investments into one report. The most recent version shows that certain asset classes, such as classic cars, fine wine and coins, have done very well over the past decade (see box overleaf). However, other alternatives have disappointed – over the same period, the value of antique furniture has fallen 32 cent, with Chinese ceramics down two per cent. To add to the mixed message, deeper analysis of the performance in a single asset class reveals segments that have outperformed the stated figures and others that have underperformed.

Words: Chris Menon

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march/april 2018 41

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Finance

Finance For example, the Liv-ex 100 index of most-traded Bordeaux wines is up 29.4 per cent over 10 years (to December 2017). It’s the accepted industry benchmark, quoted by both Bloomberg and Reuters. Yet the Liv-ex 1,000 index, which Liv-ex itself states is ‘the broadest measure of the market’, is up 76.9 per cent. Putting this performance into proper context, Liv-ex Director Justin Gibbs explains: “As a portfolio diversification tool, the long-term data suggests that fine wine is an interesting alternative asset. Detailed Liv-ex data going back to 1988 shows a compound average return on investment grade wine – specifically Bordeaux – of 12 per cent. However, like all markets, there are cycles. Timing plays an important role.”

Photo credit: / Shutterstock.com

FINDING A NICHE In the shorter term, certain assets have performed well over the past year. According to the KFLII, wine is up 17 per cent for the 12 months to the third quarter of 2017, ahead of art (16 per cent), with cars delivering seven per cent and coins four per cent. There doesn’t seem to be any simple reason for the divergence in performance, and Adam Moorshead, Managing Director, Guernsey at JTC Group, disputes the view that with stock markets booming and cryptocurrency in the limelight, people are now less interested in alternative assets. “The level of interest is higher than ever in my view,” he says. “The explosion of interest in cryptocurrencies and initial coin offerings, blockchain, the bullish markets, and the generally positive global economies have meant that there are investments being made in alternatives that have been pretty dormant since the crisis. “Investing in alternatives has never been about chasing aggressive returns in my view – it’s largely

driven by personal interest aligned with availability and a healthy risk appetite.” Moorshead also believes alternative assets as a whole are too broad in scope to make the simple generalisation that they’re all cyclical in nature, though they are clearly driven by basic market principles of supply and demand. “Given the niche nature of the markets involved, there’s an inherent risk of significant volatility and the market can disappear very quickly if the asset falls out of fashion,” he adds. He doesn’t believe the usual reasons for investing – diversification, noncorrelation with equities and high returns – apply so much to alternatives, given that “there are plenty of other ways to diversify your portfolio without the equivalent risk”. Indeed, he says: “For the majority of investors, it’s about passion and having a flutter.” James Haithwaite, a private client trustee who specialises in classic car collection management and curation services at First Names Group, believes collecting classics can satisfy hobbyist and investors alike. “For the enthusiast, there’s still the thrill of sharing their passion with like-minded people at events like Goodwood and the Le Mans Classic, as well as just going out for an early-morning drive to clear the cobwebs. For investors, there’s the potential of getting a significant return on their investment, although it should be noted that there is now a flight to quality within the asset class. “The days when all collector cars appreciated in value appear to be over for the moment, with primarily the best of the best becoming more sought after.” That said, Haithwaite points out: “I’ve seen car collectors buying cars because they’re a passion, but then they find that the value of the cars becomes more

THE TOP THREE PERFORMERS Looking at the Knight Frank Luxury Investment Index (KFLII), the best performing alternative assets over the past five and 10 years have been cars, wines and coins.

CARS

362 %

42 march/april 2018

The value of cars is up 117 per cent over the five years to the second quarter of 2017, and 362 per cent over 10 years, according to KFLII. It draws its data from the Historical Automobiles Group International (HAGI) Top Index, which tracks the 50 most investable cars in the world. These include cars such as Ferraris, Bugattis and Paganis — a 1964 Ferrari 275 GTB was recently sold for US$8 million at auction. According to Andrew Shipley, editor of the KFLII report, this market has really only taken off in the past 15 years. Moreover, James Haithwaite, a private client trustee at First Names Group, believes one reason for the outperformance of classic cars is that it has evolved from a specialist hobby to a mainstream asset class of interest to investors worldwide.

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Finance

Investing in alternatives has never been about chasing aggressive returns – it’s largely driven by personal interest aligned with availability and a healthy risk appetite

than their house, which is something that probably wasn’t envisaged when they invested in their hobby.” Robert Lewis, Chief Executive at Lordes, which offers classic car owners premium storage for their vehicles, is more pragmatic. He’s of the opinion that a combination of inelastic demand for rare vehicles, an uncertain economic climate and growing global demand for alternative asset class investments demonstrates that investing in such vehicles is “a secure and sensible diversification”.

INS AND OUTS For those seeking to access niche alternative asset markets, investment via a fund structure is a common approach. There are plenty of investment funds out there, although investors should do their due diligence and make sure they know the risks involved. And

then there are those who prefer to invest directly, taking physical possession of the asset – likewise, there are all sorts of caveats here. One issue often associated with alternatives is a lack of liquidity. It’s a risk that needs to be considered, given the relatively small, niche nature of these markets. Yet, as Moorshead points out: “Liquidity is nearly always available in any market, but rarely at a value that investors want to accept.” As for classic cars, Haithwaite says his clients have found them to be “generally pretty liquid”, with many potential sale routes – specialist car auctions, specialist brokers, as well as the online sale market. That said, he believes investors should always fall back on the tried and tested buying rules. “The five important factors that are essential for all potential purchases are provenance, rarity, usability, desirability and originality,” he explains. Liquidity is certainly a concern among wine investors, as Andrew della Casa, Director of The Wine Investment Fund, confirms. “We deal exclusively in select Bordeaux wines where this volume is assured. We also avoid wines at the en primeur stage, where price and liquidity are typically more volatile and the returns achievable don’t justify the risk.” Yet despite the liquidity and volatility issues, one in six investors holds collectibles such as watches, coins, stamps and wine as part of their portfolio, according to a study by Lloyds Private Banking. So does this mean that, despite flying under the radar for a while, investing in alternatives is still an attractive proposition? The consensus among our experts is that alternatives as a whole remain popular, with each niche delivering good returns for those that have combined their passion with sound investing sense. n CHRIS MENON is a freelance finance writer

WINE

COINS

Fine wine delivered a return of 231 per cent over the 10 years to the second quarter of 2017, and 61 per cent over five years according to the KFLII. The data is provided by Wine Owners, an online platform that helps wine lovers obtain and trade in fine wines, which created the Knight Frank Fine Wine Icons Index. According to Nick Martin, Founder and Executive Director of Wine Owners, the market has been driven by a growing interest in wine from wealthy people, particularly those in mainland China and Hong Kong.

According to KFLII, coins rose in value by 182 per cent over a 10-year period and 50 per cent over five years, based on the Stanley Gibbons GB200 Rare Coins Index. Even within this average, certain areas have performed better than others. Neil Paisley, Managing Director of coins specialist AH Baldwin & Sons, explains: “Ten years ago a five-guinea piece would have cost £8,000 on average for a good example. Now a similar example would cost £40,000.” “Many people think the more expensive items have done particularly well because they appeal to wealthier collectors. Many collectors and investors, lacking faith in the banking system and suffering poor rates of interest, would rather have their money out of the bank and into something that they physically own,” he adds.

231%

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182%

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ADVERTORIAL FEATURE

Cash reserve planning for Charities The first of four in the Jersey Charity investment series by Joel Graves, CFA, Investment Manager, Smith & Williamson International Limited. Smith & Williamson is one of the UK’s largest independent financial services firms and has a rapidly growing presence in Jersey as a tax, accountancy and investment services provider. Smith & Williamson Investment Management manages over £2bn of assets for charities in the UK and internationally. The introduction of the new Jersey Charities (Jersey) Law 2014 and the appointment of Jersey’s first independent Charity Commissioner including the establishment of a tribunal to be known as the Charity Tribunal, is aimed at supervising Jersey registered charities and associated parties, and is designed to bring about radical change within the sector. The Law and related changes are designed to help the charitable sector flourish over the long term, in the process instilling confidence in the sector by introducing standards, expectations, and accountability. For a Jersey charity, this means that associated parties, i.e. trustees, governors need to carefully consider their activities and responsibilities in relation to assets under their supervision.

Good governance pays: reserves management attracts large donors One of the greatest challenges facing charities is balancing cash-flow with demand, especially where the charity has irregular or uncertain trends in raising or spending those funds.

“Trustees, governors need to carefully consider their activities and responsibilities in relation to assets under their supervision.” Cash deposit returns, where available, are at record lows and trustees are always under pressure to mitigate the impact of inflation on the assets in their care or to

enhance returns by taking more risk with their investments, as trustees plan the charity’s longer term future. This pressure and the governance and oversight required will only increase with planned developments in regulation.

“Accumulated cash can be prudently planned and used to fund future expenditure.” Charities may have a range of sources of income, for example investments in a portfolio, income from property, grants, donations and legacies. Accumulated cash, which represents unspent past income, can be prudently planned and used to fund future expenditure. Good examples include major projects or to permit services to continue when current income falls short of requirements. Figures provided by the Charity Finance 250 Index suggest that charities that have strong governance (including appropriate cash allocation) can expect strong results. In the most recent numbers available, which cover the year to 30 June 2016, the Index reported that over a third of its members experienced double-digit income rises. It is also reasonable to conclude that charities that measure such outcomes have a greater prospect of receiving new donations, particularly from grant-giving bodies or philanthropic donors who work to very strict guidelines.

“Charities that measure outcomes have a greater prospect of receiving new donations.”

Cash reserves too high or too low? Deciding the level of reserves that a charity needs to hold is an important part of financial management and forward financial planning. Failure to manage reserve levels may result in resources which are either higher than necessary, exposing the trustees to questions of efficiency or effectiveness; or too low, increasing the risk to the charity’s ability to carry on its activities in future in the event of financial difficulties, and increasing the risks of unplanned and unmanaged closure and insolvency.

“Liquidity and cash reserves should be a standing agenda item at committee meetings.” Where a charity lacks the free reserves it needs, the charity is exposed to a high degree of risk. Trustees should be actively addressing this by implementing a reserves policy, raising the necessary funds, diversifying their funding base, and mitigating the risks that might arise if the charity has to close suddenly. Liquidity and cash reserves should be a standing agenda item at committee meetings. Conversely, a charity’s cash allocation may appear to be too high. If this is the case, donors, beneficiaries or the authorities may reasonably raise questions about the way the charity is being managed. Typically, this can happen for two reasons; either the trustees have not sufficiently explained why they are keeping reserves, i.e. where this services a long term purpose, or because they

ADVERTORIAL FEATURE

are having difficulty in using their funds. Charities with excess reserves or unspent funds could consider whether they could be more effectively invested for a regular income to fund future liabilities and charitable purposes, or consider whether the purpose of the charity should be amended to enable the charity to operate more effectively. Given the often volunteer-led oversight of reserves it is certainly prudent to segregate responsibilities and reduce risk of fraud.

“It is certainly prudent to segregate responsibilities and reduce risk of fraud.”

Practical guidance for Treasurers and Trustees To work out how much cash to hold, it is necessary to consider the charity’s operating expenses and future obligations and balance this against any regular income. The right level of cash will depend on how the charity funds its activities and what level of certainty there is of future income. As charities come in a range of shapes and sizes there is no one right cash amount that a charity should hold in cash reserve. For example, a charity that receives rental payments from properties it owns (houses, buildings, land, etc.) or receiving income form an investment portfolio will receive a regular income and therefore may not need to hold a great deal of cash in reserve; conversely, a charity that is funded mainly by donations may have sporadic and unpredictable cash-flow and would be expected to hold higher cash reserves to meet its fixed or known obligations.

Once the amount is agreed the trustee should give careful consideration to how they invest these funds factoring in liquidity requirements and potential drawdown levels. A diversified portfolio maybe appropriate utilising cash deposits, and potentially fixed income and in some cases equity securities. We recommend professional Investment advice should be sort by the trustees to help with this planning.

The importance of good governance and best practice Good governance and oversight is a key part of ensuring that a charity serves the best interests of its intended beneficiaries. Whether holding a large amount of cash or a little in the charity, the first step should be to consider whether that sum is appropriate to its needs, then document this and review regularly. Finally, for larger sums we recommend that trustees seek professional investment advice to efficiently manage these funds on an ongoing basis. Don’t make assumptions about minimum investment amounts, lack of liquidity, or costs. Jersey is incredibly well served by the investment industry with significant experience and knowledge. These experts are experienced at supporting professional trustees to invest assets appropriately and without incurring significant costs.

Step by Step guide to cash reserve planning 1. Set a Cash Reserves policy and formally document how the figure has been calculated. 2. Monitor the position; excess cash or shortages will attract scrutiny from stakeholders; diarise for regular review and consider appointing an auditor or independent reviewer. 3. Think carefully before making long term fixed or unbreakable commitments; try not to bind future trustees’ hands. 4. Seek professional investment advice; there are a wide range of cash and investment solutions available for all size of portfolios and cash amounts. 5. Communicate: great governance and outcome reporting attract donations.

Joel Graves Investment Manager t: 01534 716823 e: joel.graves@smithandwilliamson.com

Joel has been supporting clients with complex investment structures for over 10 years and is supported by an extensive network of 170 colleague analysts and investment managers who manage in excess of £20.4bn (as of 31 December 2017). Joel is a holder of the Chartered Financial Analyst (CFA) designation and a member of the Chartered Institute for Securities & Investment (CISI), and teaches the highly regarded CFA qualification to Jersey students in his spare time.

Important information Please remember the value of investments and the income from them can fall as well as rise and investors may not receive back the original amount invested. Past performance is not a guide to future performance. Smith & Williamson is an independently owned financial and professional services group with over £20bn of assets under management (as at Dec 2017). The firm is a leading provider of investment management, financial advisory and accountancy services to private clients, charities, professional practices, entrepreneurs and mid-to-large corporates. The group’s c1,700 staff operate from a network of twelve offices: London, Belfast, Birmingham, Bristol, Cheltenham, Dublin (City and Sandyford), Glasgow, Guildford, Jersey, Salisbury and Southampton.

smithandwilliamson.com By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing. The tax treatment depends on the individual circumstances of each client and may be subject to change in future. Smith & Williamson International is regulated by the Jersey Financial Services Commission. Smith & Williamson (Channel Islands) Limited Registered in Jersey at 3rd Floor, Weighbridge House, Liberation Square, St Helier JE3 2NA. No. 109157. Smith & Williamson Investment Management LLP Authorised and regulated by the Financial Conduct Authority

Finance

s ’ r e f f Blu

Guide to GDPR As the implementation date for the EU’s General Data Protection Regulation approaches, Businesslife looks at what it entails and why firms need to be sure they’re ready

Words: Kirsten Morel

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Finance

WHAT IS GDPR AND WHO WILL IT PROTECT? GDPR is Europe’s new framework for data protection laws – it replaces the previous 1995 Data Protection Directive. “GDPR recognises the increased need for control and management over what organisations can do with private information,” explains Elaine Gray, Partner at Carey Olsen. “It couples this with a more rigorous enforcement regime for those who don’t follow the rules. “The new regime is designed to integrate privacy considerations into the heart of how every organisation operates and to give individuals much better control over who gets their information and what they can do with it.”

WHY IS IT BEING INTRODUCED? The reality is that the old rules were no longer fit for purpose. The amount of digital information we create, capture and store has increased massively in recent years. GDPR isn’t aimed at creating new legal controls but “updates and improves the current regime” created by the 1995 Directive, says Emma Martins, Data Protection Commissioner for Guernsey. “It strengthens our rights in this digital era, which has seen an explosion in the amount of data being processed about us. It’s designed to be technology-neutral to ensure that it’s futureproof in this fast-evolving environment. It recognises that there are certain fundamental principles which should apply around the handling of our information.”

HOW DOES GDPR DIFFER FROM ITS PREDECESSORS? “Organisations that handle personal data (data ‘controllers’) now have increased responsibilities to process data in an accountable and lawful manner,’ says Martins. “They will have

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to report any breaches to the regulatory authority, which is a completely new requirement. Also, for the first time, there are statutory duties for data ‘processors’ (organisations that process data on behalf of data controllers). “More and more organisations benefit from relationships with providers, whether that’s for cloud services, financial administration or HR support. It will be more important than ever to ensure that such providers understand their own legal duties and that the contractual agreements between data controllers and data processors reflect the new requirements.” For Gray, GDPR’s focus on individual rights and greater transparency about the use of data are some of the key differences. “Under the old regime, individuals had a right to obtain certain information about their data and to get copies of this. These rights are considerably enhanced under GDPR, with individuals being able to force a business to hand over information about how it’s using the individual’s data and why. “This also requires businesses to explain whether the individual is required to give their data and the consequences if they don’t do so.”

DOES GDPR INCLUDE PENALTIES FOR NON-COMPLIANCE? GDPR gives regulators the opportunity to levy considerable fines for breaches, but Sara Johns, Partner in Ogier’s corporate team, believes this power will be used sparingly. “The proposed penalties of up to €20 million or four per cent of global annual turnover (whichever is higher) have attracted the headlines and forced commercial organisations to take the law seriously, which was the intention. In reality, fines at that level are only likely to be levied in the most egregious cases.” Martins also sees the headline-grabbing fines as detracting from the real purpose of the laws. “If we spend all our time and energy doing something solely to avoid legal or financial sanction, we’re focusing on the wrong thing. Rather than seeing this as a burden of regulatory compliance we need to embrace it as an essential part of doing business in the 21st century. “Doing data protection well underpins good business models and successful economies. Data is the most valuable, non-consumable asset any organisation has and needs to be looked after as such.”

HOW WILL BUSINESSES BE AFFECTED AND WHAT ACTION SHOULD THEY TAKE? All non-domestic processing of data is covered by the new regulations, but because businesses should already be in compliance with existing laws, companies aren’t in the position of having to start from scratch when considering GDPR’s ramifications. Each organisation will also have its own data profile, which means that there’s no one-size-fits-all solution. “The scale of change facing businesses hinges on the kind of personal data that they hold, and what they do with it,” says Johns. “It’s hard to imagine a business of any kind that doesn’t have a database of customers – but some businesses will go significantly further than a list of names and addresses, and may need to hold health or financial information. They

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AS THE MOST ardent Brexiters are discovering, the UK’s exit from the European Union won’t mean an end to the enactment of EU laws and regulations by Westminster. At best, it will mean the creation of UK-equivalent laws that, in order to maintain trade and services with the world’s largest free market, will essentially be copies of EU mandates. One of the clearest examples of this is the European Union’s General Data Protection Regulation (GDPR), which comes into force on 25 May and must be complied with in the UK if businesses want to trade with EU citizens. It can be argued that the new data protection regulations swing the pendulum away from businesses and towards consumers. But however you interpret their effects, with the Channel Islands adopting their own equivalents, organisations of all sizes have to be aware of the changes that will hit them in May. We spoke to five Channel Island-based experts to find out more about GDPR and its likely effects.

Finance

access all areas

Data is the most valuable, non-consumable asset any organisation has and needs to be looked after as such

will need to take more care in how they process, store and use that data.” With GDPR’s greater scope for sanctioning organisations when they fail to meet the new standards, Kate Sole, Programmes Manager at GTA University Centre, says companies should take time to review their processes and third-party relationships. “For many businesses, this means appointing a data protection officer, training existing staff in data protection, or employing external contractors to support them through the change,” she says. “Ideally, all businesses by now should have a clear plan in place that will prepare them for compliance by 25 May, including performing data audits, reviewing their data privacy policy, reviewing policies and procedures, running staff awareness sessions and so on.” There’s certainly work to do, but as Jon McCulloch, Enterprise Sales Director at Sure, points out, organisations don’t need to do it all by themselves. “GDPR is new and certainly has more teeth than its predecessors, but that doesn’t mean compliance has to be a burden,” he says. “Firms can achieve the majority of GDPR’s requirements by working with trusted third parties that not only understand the implications of the new law, but which also have the resource to ensure compliance.”

IS GDPR JUST AN INFORMATION TECHNOLOGY ISSUE? McCulloch says not. “GDPR compliance requires a business-wide transformation of privacy and governance operations wherever personal data is stored or processed.

Given that this will include customer records, databases, CRM systems and ERP platforms, technology certainly plays a role in protecting personal data. “Organisations need to review their data security culture as well as the adequacy of their systems in order to become GDPR-compliant. In practice, this means that organisations using data centres and cloud services to process data must ensure that their providers comply with GDPR. Companies should confirm that their providers offer ‘GDPR-ready’ contracts that contain the relevant EU ‘model clauses’ to ensure compliance.” For Sara Johns, GDPR is about the people within an organisation and the way they perceive the importance of data security. “Fundamentally, GDPR is a cultural, not an IT issue,” she says. “Businesses can’t survive without data about suppliers, customers and staff. This legislation seeks to acknowledge that, and to create responsibilities and rights to reflect the importance of data in an era in which it can be transmitted very easily and quickly, with potentially serious consequences. It also acknowledges the weakest link in information security practice tends to be people and behaviour, not a lack of sophistication in firewalls.”

WITH SO LITTLE TIME LEFT, IS EVERYONE READY? GDPR has been the subject of business media attention for well over a year, but that doesn’t mean every business is going to be ready. “In November of last year, [technology solutions provider] Thales stated that two out of every five UK companies responding to their survey didn’t think they would be ready, so it’s unlikely,” says McCulloch. On the other hand, Kate Sole has seen demand rising for GDPR courses in Guernsey, which suggests that local awareness in the Channel Islands may be higher. “Judging from the intake on our GDPR training courses, there are a large number of people and organisations locally who are preparing themselves appropriately. “Of course, we’re just seeing part of a bigger picture, but hopefully everyone who’s attended training courses in this area is sharing their knowledge with colleagues and is confident that they’re ready for 25 May.”

HOW HAS GDPR BEEN RECEIVED? Regulation creates opportunity and while businesses may not be keen on having to implement GDPR processes, Sara Johns believes that there are positive factors to be taken from its introduction. “Few businesses tend to welcome additional layers of regulation, but in this case there are definitely opportunities for companies who adopt gold standard policies and practices in complying with GDPR. “The public are much more aware of the value of their data and much more attuned to how they can expect it to be handled, so they’ll choose who handles it accordingly. Those businesses that embrace the cultural importance of GDPR as a means of safeguarding data in our digital age will see it as a positive that brings its own benefits.” n KIRSTEN MOREL is a freelance technology writer

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Business

Diversity

in the Channel Islands: is it achievable?

As diversity and inclusion in the workplace become a business and human imperative, where do Jersey and Guernsey stand? and are they lagging behind the UK and Europe?

50 march/april 2018

Words: Dave Waller

THERE’S NOTHING LIKE a racially intolerant White House, revelations of entrenched sexual abuse in Hollywood and a rise in hate crimes against LGBT people to breathe real vitality into business buzzwords. Just when the concept of diversity was threatening to tip into an empty, corporate tick-box exercise, events in the wider world have conspired to remind people just how vital the concept has been all along. When PwC ran a survey of more than 800 organisations around the world in 2016, 87 per cent said diversity and inclusion was a stated value or priority. Diversity in this instance means ensuring there’s a balance of everything from race and religion to gender and sexual orientation, even age, experience and trade. Inclusion means giving all of those people an equal voice across the organisation. The business logic is well understood: a more diverse and inclusive workplace will lead to a wider variety of perspectives and ideas, create greater engagement among employees and generate more creativity and productivity. Such a company will also be more likely to relate to its client base – itself increasingly diverse – and thus have a better chance of winning extra work. And all of this ultimately boosts profitability. According to McKinsey, companies in the top quartile for gender diversity are 15 per cent more likely to have financial returns above their national industry average. Companies in the top quartile for racial and ethnic diversity, meanwhile, are 35 per cent more likely. But while it’s predictable that business should number-crunch its way to a

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rationale for such change, it would be remiss to skip over the other driver here – the human element. Surely diversity is simply business taking the step to give everyone the same chance of living a meaningful life? ‘What’s the alternative?’ is a question that, until recently, may have been asked rhetorically. We’re now starting to see just how regressive the answer is. “If you’d asked a Victorian industrialist about the health and safety of his workers, he’d have asked you to provide a business case for why he should care if they suffer in his mills and factories,” says Paddy Haversham-Quaid, Chief Experience Officer at Liberate, the Channel Islands’ equality and diversity charity. “Today, we know better,” she says. “As leaders of organisations, we should know we have a moral duty to keep our employees safe, irrespective of any legal obligations. And in our global economy, where technology is shrinking the gaps between peoples and countries almost daily, we should be approaching diversity in our organisations in the same way – as a moral duty, not simply as an investment that provides a return.”

PLAYING CATCH-UP

Business here has traditionally been as straight and white as a vapour trail. Yet despite the good intentions, it’s clear the islands have been playing catch-up. The population is limited by geography, and even by law, given the limited number of licences granted to organisations to bring in new employees. So when it comes to opening up the recruitment process, even the most ‘woke’ company will struggle more than an equivalent in London. Yet a financial services company in the Channel Islands is as likely to be dealing with clients in Asia or Africa, or dealing in fields such as Islamic finance, and thus would benefit equally from a diverse team. Claire Malkoun, Head of Business Development at VG, moved back to Jersey in 2016, after working in London with the law firm Ashurst. There, she’d worked alongside the company’s Head of Diversity, hosting events around gender balance and LGBT representation in the workplace. “Working there really increased my awareness of diversity, mental health and unconscious bias,” says Malkoun. “It was very moving to hear people’s experiences. It’s about being human, staying in tune with people from different

beliefs and backgrounds, and having respect for their voice, so people have the confidence to reach for new positions or to pursue their ideas.” There are thousands of such stories out there of individuals blocked from making a meaningful contribution, whether suffering debilitating self-doubt through anxiety or depression, or being turned away at interview because of their sexual orientation or because their own beliefs are more progressive than those of their employer. These are things many of us simply don’t have to worry about, and yet are surely not traits that should be derailing career progression. “By taking steps to prevent discrimination, and removing barriers in the recruitment and selection process, businesses can increase the pool of talent available and ensure that they’re recruiting the right person for the job,” explains Nicola Ioannou-Droushiotis, Chief Executive at GET. Working in London, Malkoun was struck by the strength of commitment to diversity, from the company’s senior management, as well as from its clients, who often made diversity a requirement for

Organisations such as Liberate and the Guernsey Employment Trust (GET), which helps disabled and disadvantaged people prepare for, find and maintain work, show how diversity is finally making headway in the Channel Islands. This is good news.

Business in the channel islands has traditionally been as straight and white as a vapour trail. despite the good intentions, it’s clear they’ve been playing catch-up

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Business

By taking steps to prevent discrimination, and removing barriers in the recruitment and selection process, businesses can increase the pool of talent available and ensure they’re recruiting the right person for the job

doing business. “Clients would challenge law firms on their diversity policy, their balance of men and women, how they cater for disabled people, and their provision for different religions,” she says, adding that she’s encouraged by the progress she sees being made in the islands.

MOVING FORWARD There’s certainly movement here. In late 2016, Liberate launched DIFERA, an accreditation awarded to Channel Islands companies that focus on diversity, inclusion, fairness, equality, respect and acceptance. BCR Law, which has an employment practice specialising in advising employers in discrimination law, was the first Channel Islands law firm to have its workplace DIFERA-approved. “We realised we needed to walk the talk around discrimination and do something internally with our staff,” says Wendy Lambert, a Partner at the firm. “With a population as small as Jersey’s, you don’t necessarily encounter certain issues day-today, so it’s having that awareness and being proactive, not just muddling through. “The process has been really good: it’s about leading from the top, reviewing policies and procedures, keeping an open mind in recruitment, and training everyone to remember that people from all walks of life can each bring something different.” The big question for the Channel Islands

52 march/april 2018

– given how entrenched the old ways are, and with restrictions on population – is whether they can make the desired changes, even if there’s the right intent, especially in sectors such as financial services. “While the finance industry here is perhaps still predominantly white males, that is changing,” says Liberate’s Haversham-Quaid. “We have many other nationalities here and we’re encouraging clients to look at their recruitment processes, so they don’t simply follow the usual gut reactions around cultural fit, and instead open their minds to those who are different to them. So it’s certainly feasible that we can take organisations on a journey and give them the tools and language to be inclusive.” The islands are certainly showing signs that they’re making progress – and quickly. In February, Jersey’s government approved amendments to the island’s marriage legislation that allows same-sex couples and couples where one or both partners are transgender to marry. It also voted down a law that would have legalised discrimination against same-sex couples. Meanwhile, the States has quickly extended its discrimination legislation, first introduced in 2013, to include protections for race in 2014, sex, sexual orientation, gender reassignment, and maternity and pregnancy from 2015, and age in 2016. It has managed to catch up with the UK, achieving in five years what the UK took from 1973 to 2010 to achieve. Ioannou-Droushiotis points out that in its three years of existence, GET has supported almost 200 disabled people into paid work, and many of the companies involved have become loyal customers, recruiting several staff with its help. All of which shows that the islands do have the agility to act on diversity, if the will is there. So much change will come down to people’s attitudes and perceptions. Investing in awareness training, in other words, is key. “I’ve had employers say to me before that they can’t employ people with disabilities,” says Lambert. “But what

do they mean by that? People have told me their building isn’t suitable. In other words, some people who use a wheelchair may not be able to access certain parts of their building. But just a few minor adjustments could bring you a person with ideas, experiences and skills that you’ve never had before, which could transform your business. “Don’t make assumptions – if someone’s applying, they know their capabilities better than anyone.” n DAVE WALLER is a freelance business writer

The DIFERA way DIFERA is Liberate’s employer accreditation scheme. It aims to provide organisations across the Channel Islands with a quality mark that can be used to demonstrate their credentials as a diverse and inclusive employer. But how does it work? When an organisation joins the scheme, Liberate undertakes an audit of the firm’s employees, from which it produces a report that sets out where an organisation currently stands on its DIFERA journey. Liberate then facilitates the forming of a DIFERA champions group within the firm and works with it to produce a DIFERA strategy. Liberate offers training to these champions, so that they can train their colleagues and provide inductions to new starters. Depending on the type of business, Liberate might be required to provide further specialist training. Having met the above requirements and completed any remedial work required by the audit, a business will be admitted as an accredited member of the DIFERA scheme. To find out more about the scheme, visit www.liberate.je/difera

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Business

Businesses are generating more copy than ever, but so many of them are doing it badly. Just why do they end up using jargon and scrambling their words? and what can they do about it?

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“WHEN I USE a word, it means what I want it to mean – neither more nor less.” So said Humpty Dumpty when Alice pointed out that what he was telling her didn’t make any sense. As Alice seemed to be more taken aback by Dumpty’s cavalier approach to meaning than by the fact that she was discussing semantics with a giant egg, it’d be easy to write off the exchange as a typical Lewis Carroll flight of fancy. But you hardly have to venture through a looking glass these days to encounter people abusing English. Indeed, walk into any financial services office and you risk being urged to sing from the same hymn sheet regarding future-proofing deliverables vis-a-vis equity ETFs going forward. It’s enough to fry or scramble any brain. While many organisations pay lip-service to the idea of effective communication, too many still fall back on redundant, impenetrable or plain meaningless language. You find it in everything from press releases, corporate brochures and PowerPoint presentations, to websites, blogs and YouTube scripts. Yet in this hyper-connected age, it

couldn’t be more important to convey your message clearly and succinctly to your audience – whether that’s customers, industry peers, employees or potential new recruits. And should you actually manage to grab their attention, you don’t want them left, as Alice was, “too much puzzled to do anything”. The old cotton-spinning town of New Mills, on the edge of the Peak District, is home to the Plain English Campaign, an independent group on a mission to cleanse the worlds of business and politics of gobbledygook, jargon and misleading public information. The campaign began back in 1979, when Chrissie Maher stood in London’s Parliament Square and showed her disdain for official documents by shredding hundreds of them. Maher’s team is now brought in by organisations worldwide to review, edit and apply its ‘Crystal-mark’ of clarity to their official documents – everything from terms and conditions for banking products to brochures for zoos. “At root, it’s about making public domain language far more accessible,

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Images: Shutterstock.com

Words: Dave Waller

Business

Just walk into any financial services office and you risk being urged to sing from the same hymn sheet regarding future-proofing deliverables vis-a-vis equity ETFs going forward

democratic and inclusive – so the information that people find useful becomes as readable as possible,” says Lee Monks, a writer and editor at the Plain English Campaign. Monks’ principle bugbear is jargon, the prevalence of which, he believes, stems from the “harassed office environment” in which many people find themselves working. “Jargon is often used to make a flimsy middle-management role sound very complicated and impressive,” he says. “By bandying about these bits of code, you can show that you’re playing the game and are worthy of promotion. From the outside, it seems idiotic.” And that’s the biggest issue with jargon – it’s often used with no thought for its appropriateness to the audience. “Jargon tends to go wrong when you take a simple idea and make it more confusing than it needs to be,” says Simon Le Tocq, Chief Executive at the GTA University Centre in Guernsey, and a former linguistics professor. “The word ‘synergise’ simply means to work together; ‘break down silos’ to share

information. ‘Ideate’ – which I hate – means simply ‘to think’. “Jargon creates a veil that can isolate and alienate the receiver of the message. Saying exactly what you mean builds greater trust, credibility and authenticity.” Yet jargon isn’t the only problem in the business lexicon. When it comes to writing, people often produce what Monks describes as “reams of rubbish”, because crafting a tight piece of writing that will have an impact takes time. And while the modern business world requires increased output, it hardly gives people the space or resources to master the art. “You now have professionals in certain fields having to write posts or articles and they may not be practised at it,” says Dan Gallienne, Account Manager at Orchard PR, for whom over-writing is “the biggest crime”. “People often assume that writing an article is easy when you know the subject. But while a lawyer or accountant may be confident talking about it, too often that doesn’t translate to a well-written piece. A person needs to deliver information in a way people want to receive it.” Yet that doesn’t happen in every case. Language sometimes seems deliberately impenetrable. If you’ve ever read the terms and conditions for an online service, for example, you’d be mistaken for thinking a giant egg had been drafted in to write them. If, that is, you’ve ever bothered to read them.

LET CONFUSION REIGN However, that may be the point. Other companies will happily sacrifice clear language in their marketing materials in order to hoodwink punters into buying something. Certain finance companies did just this following the financial crash, using euphemistic language to cover up yet more questionable products. “We’ve had so many letters from people saying they bought something because they didn’t want to admit they didn’t understand it,” says Monks. Whatever the motives, this kind of language is now all over the public domain. Le Tocq cites Speedo’s ‘hair management system’ (swimming cap), Nestlé’s ‘affordable portable lifestyle beverage’ (bottled water), and Uber’s admission in June that it had ‘under-invested in the driver experience’ and was suffering a ‘reputational deficit’. “In other words,” says Le Tocq, “Uber had screwed over its drivers and its name was mud.”

56 march/april 2018

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Business

Clear language is ultimately in the interests of businesses – at least those that see the benefit of respecting their customers. Laura Welsh, PR and Communications Officer at VG, believes the days of wilful obscurity are fading. “People don’t have the time to waste these days,” she says. “We’re bombarded by so many forms of communications now, and people are bored of wading through the nonsense. “They’re reading on their devices more than ever, and you really have to get points out very quickly. Financial services are complicated – so those who make it simple will win.”

BACK TO BASICS She relates how, when she arrived at VG, she got everyone to talk to her “like an idiot”, so she could understand what they were on about. That approach made it easy for her as a new starter. It also set a good template for VG’s recent rebrand, in which the company took materials and assets gathered over 35 years of trading and updated it for the age of websites, mobiles and social media. “We’re normal people with a normal job, which just happens to have a technical aspect,” says Welsh. “Our MD is passionate about plain English. Whenever I speak to him, he says: ‘Short, Laura. Plain English. No nonsense, no jargon, no extra words. Get the point across. Done’. And he’s encouraging everybody to take that message on board.” The good news is that writing isn’t an impossible task. Simply following a few simple guidelines can make writing far more economical and engaging (see right). People certainly shouldn’t be scared of trying. Indeed, as we head even further into a world of mass democratic communication and open platforms, companies will only expect more people to contribute. Yet the same principles of brevity, clarity and keeping your audience at the front of your mind will apply every bit as much to short tweets and video scripts as they do to articles – perhaps even more so. “We’ll probably see more and more people writing in public, with more platforms available,” says Dan Gallienne. “My hope is that communications teams will become more prominent within companies, whether that’s people with communications backgrounds sitting at board level, or boards simply consulting professionals as a resource. “Writing has to remain interesting,

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regardless of the platform and format. That’s the key.” The Plain English Campaign claims to have reworked and approved more than 22,000 documents worldwide since 1979. Given the proliferation of platforms, and the great untrained being unleashed upon organisations’ customers and employees in ever-greater numbers, the question is whether we can ever do anything to ditch the dreaded jargon. “When I first started here, I thought maybe it’d be better next year,” says Monks. “It wasn’t. Nor the year after. But is it getting worse? No. You’ll always have people who get excited about incomprehensible neologisms that float into certain environments and keep them moving. And you’ll always have those who oppose that. Our job is to point it out, show why we think it’s wrong and allow people to make up their own mind.” He couldn’t have put it any clearer. Or could he? n DAVE WALLER is a freelance business writer

Top writing tips ● Keep your audience in mind at all times You need to speak to them on their level in a language they understand. ● Allow time for writing Good writing is a process of drafting and redrafting, which is often where extraneous elements get hacked out. ● Don’t drone on The Plain English Campaign recommends limiting sentences to no more than 25-30 words. ● Too many cooks If you have different people working on a single document, it needs to come across as a coherent piece of writing. ● Consider outsourcing Think about working with an editorial services firm or a PR team that you can trust to honour the sensitivities of your sector while still engaging an audience. You’d employ a plumber to fix your drains, so why not use a writing expert to fix your words? ● Set the rules Create a style guide to help internal writers keep tone and style consistent across the company, and a crib sheet for new joiners to demystify the whole thing. ● Encourage people to get involved As Laura Welsh at VG points out: “You ask some people to write and you can see the fear in their eyes; others relish it. Go to the junior members of your team to get them to contribute, not just your senior team or marketing team.” ● Don’t be predictable As Welsh concludes: “There are all sorts of ways of presenting the information – it doesn’t have to be a 1,000-word essay with a start, middle and end like at university. It can be a ‘listicle’, top tips, a day in the life or a Q&A. It’s about collecting knowledge within the company and presenting it to the world in an interesting way.”

march/april 2018 57

Business

When bosses Flexible working is one thing, but is it possible for senior management to carry out their jobs on a part-time basis? Apparently it is

58 march/april 2018

concession for parents at a very specific point in their lives,” she says. The revolution in working hours isn’t only a generational demand by younger workers, but a reflection on how society has fundamentally changed since the days of the traditional male breadwinner working nine-to-five, five days a week. “A firm ignores part-time at its peril, because in the end what we’re seeing is a growing number of people at all levels, including the higher tax bracket, choosing to work part-time,” warns Mattison. “If you ignore it, you won’t be an employer of choice and people will vote with their feet.”

PROOF OF THE PUDDING Rebecca Stannard is exactly that kind of person. As Head of Marketing and Business Development at Bedell Cristin, she was headhunted to join the law firm and initially worked part-time so that she could spend the afternoons with her young children. She recently upped her hours to full-time – but flexibly – when her youngest started school. She now works 7.30am to 2.15pm in the office Monday to Thursday, and 9am to 2pm on Friday. She makes up her hours in the evenings and at weekends. It’s a win-win arrangement for Stannard and her firm. While she gets to spend more time with her children, she says the business gets a lot more out of her because she probably overcompensates for the support they give her. “I work really hard the hours I’m in the office, but I also put in a lot of time at home,” says Stannard. “I feel really

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Words: Emma De Vita

FLEXIBLE WORKING HAS become a workplace essential – and if you want to attract and retain the best and brightest, it’s a must-have. But what about those people who don’t want the slog of full-time hours? What about those who want to reduce their hours, preferring to work part-time or in a job-share? And how feasible is this when it comes to working at a senior level in business? In 2017, more than two out of five hirers in the UK would consider recruiting for senior roles on a job-share basis, according to research from flexible employment specialist Timewise. There are now an estimated 773,000 people formally working part-time in higher income brackets, an increase of 5.7 per cent on the previous year. Trailblazing part-time senior executives include Katie Bickerstaffe, UK and Ireland Chief Executive at Dixons Carphone, and Anita Waters, Group Legal Director at Virgin Management (see page 60), both of whom work four days a week. While both women choose to work part-time because they want to spend more of the week with their young families, there are many other reasons why people don’t want to work a 35-hour week. “Generation Y is leading the charge on this. Obviously there are people with caring responsibilities, but people mainly just want a better work/life balance,” says Karen Mattison, co-CEO of Timewise. This could be wanting to set up their own business or volunteering for a charity or for sports training, for example. “It’s so much more than the idea of a

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Business

go part-time

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march/april 2018 59

Business

conscious that they’ve been so good to me.” She says she is happy to cram in extra hours because she wants to see her children. “To me it’s a choice. If you want to operate at a fairly senior level, you do need to put in the extra effort. Do you want to be in the office normal hours and potentially not have to do so much in the evenings, or cram in extra outside your working hours?” Stannard says that her firm has people working in a range of patterns, from flexible to part-time, including client-facing staff. “If people are seen to be important to the business, we would want to keep them, so try to work as flexibly as we can.” Across the island, however, she says the finance industry needs to break down the assumption that people working part-time

are less career-focused and ambitious. “It’s about having more people at senior levels working flexibly – there aren’t that many at a senior level working part-time. The more people that we have as a partner or a director that way, the easier it will be to break down that stigma.” Shelley Kendrick, Founder of Jerseybased recruitment agency Kendrick Rose, says that while some flexibility around full-time hours is available for those at C-suite level, part-time hours are something of a no-no because the expectation is that you’d be needed in the office to resolve issues as they arose. It might be acceptable to leave work early to watch your child perform in a concert, but the assumption is that you’ll be responsive 24/7 anyway.

FROM THE TOP

the finance industry in the channel islands needs to break down the assumption that people working part-time are less career-focused and ambitious

60 march/april 2018

Further down an organisation, part-time hours are possible at middle management level if you’ve proven yourself. “There needs to be mutual respect and trust – that’s when it works,” Kendrick says. Equally, working compressed hours is more common, particularly in a firm with global clients, where arriving at the office early means you can get in touch with people in different countries. Kendrick says the Channel Islands lag behind London and the UK mainland when it comes to flexible working, not least because of the pool of talent and other restrictions. But change must come, she says, especially because millennials expect work to fit around their lifestyle and are quick to part with a job that doesn’t give them the flexibility they want. “They won’t put up with it,” says Kendrick. The best way for a business to manage part-time working is by discussing the job spec with the individual, their manager and their team. Attention should be paid to how the role is adjusted to accommodate fewer hours. Otherwise ‘mission creep’ can kick in – where employees go down to four or three days a week but still find themselves shouldering their full-time job responsibilities. This can be hardest for middle managers, who perhaps have least control over their workload as they have to manage upwards as well as downwards. Ironically, it can be at the very top of business where part-time working or jobsharing works most easily. Timewise produces an annual Power Part Time List, and has 350 examples of very senior roles being delivered in less than full-time hours. When Mattison launched the list seven years ago, she was told there was a ceiling above which part-time employment wouldn’t work. But she’s found that if you’re the leader of a business, the work

Case study: Anita Waters, Virgin Management As Group Legal Director at Virgin Management, Anita Waters has worked four days a week for the past seven years, having originally joined the company full-time. She reduced her hours after returning from her first maternity leave, so that she could spend more time with her children. The first to work part-time at her level of seniority, Waters was keen to keep the arrangement constantly open for review with her manager and her team. “Having really good technology allows you to be available when you need to be, and having a top-notch Executive Assistant who’s a whizz with diary management has helped make the arrangement work.” Not only does Waters get to spend Mondays with her family, but she’s also been promoted twice during this time – testament to the fact that, when properly set up, reduced working hours can be a catalyst for career success.

can be delegated downwards. “You have more control over your time,” she says. “The challenge is the squeezed middle manager because they’re less in control of designing their role. The more senior, the more control you have.” Ultimately, part-time working for senior managers is another recruitment option that firms shouldn’t overlook. “It’s a fantastic tool for attracting and retaining the kind of people you want to work in your business,” says Mattison. “Instead of seeing it as a problem, see it as an opportunity.” n EMMA DE VITA is a freelance business writer

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Business

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march/april 2018 61

Technology

Instant messaging might help make internal communications at work a lot faster and easier, but could it also put your clients and your business at risk?

A slip

Words: Jack Flanagan

of the fingerâ&#x20AC;Ś

Technology

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been stealing the data and selling it on. The Aadhaar system produces a 12-digit code, based on biometric data and unique to any person residing in India – so the loss of this data is especially problematic because it’s very hard to discriminate between fraudulent and real biometric ID cards. There have been cases of people using the easily available fraudulent Aadhaar cards to withdraw money from banks. This was the result of sloppy safety procedures by the employees who set up the accounts, presumably because they felt it would help them work better and communicate more quickly. The India example broadly showcases how more casual forms of communication, intended for consumer and not business use, lack the safeguards businesses need to keep information safe. Cases like these are a minority. But the question of whether to develop a well-rounded digital security policy is a bit like whether to leave your front door unlocked at night – the chance of being robbed is small, but you’d be foolish to risk it. There are two questions businesses must answer. The most important is how they will approach digital security in a way that encompasses new threats. The second is whether or not to adopt enterprise software. Like a cautious but liberal parent, should they demand that, if employees must use IM apps, it’s better done under their own roof?

MESSAGING MANAGEMENT Core to considering a strategy around digital security is employee training. “Moving from insecure solutions like email to secure platforms needs to go hand-in-hand with regular security awareness training for the staff,” Alan Duric says. “Any organisation handling sensitive employee and customer data, R&D info or financial plans, needs to train staff on anything from basic good password strategies and using VPN when going online on untrusted networks, to not trusting emails, as phishing is still the biggest security risk today.” Beyond helping staff understand digital security risks, security experts warn companies to be aware of ‘shadow IT’ in their organisation. Shadow IT describes when employees use personal devices to help get through their work – texting colleagues or looking up things at lunch on their tablets. This scenario is described as ‘shadow’ because it isn’t accounted for by IT or management. It can’t be, because the list of possible devices and apps is endless. For this reason, employees must be closely involved in any process to tackle shadow IT and app use. Michela Menting, Research Director at ABI Research, focuses on technology and marketing issues. She says employees need to feel a part of the solution to shadow IT, and not that their privacy and personal

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THE IMPORTANCE OF a keen digital security strategy has been ramping up in recent years. As valuable information zips its way around the world in staggering amounts, online piracy has become more of a danger. This creates a precarious situation for businesses, where important strategic information is a few button-taps and a ‘send’ away from being put into the wrong hands. And as enterprise instant messaging (IM) makes its way into the office, it presents a notable – but innocuous – danger to data security. Most people use some form of IM software or app, often exchanging intimate information many times a day. Enterprise apps have followed the trend and skyrocketed in popularity. Slack, one of the betterknown enterprise platforms, has gone from 16,000 daily users in 2014 to six million at the end of 2017. Two million of those are paid subscribers. Wire, a German-based enterprise app with a focus on security, claims to have more than 100,000 daily users, although it only launched late last year. Co-founder and Chief Technology Officer of Wire Alan Duric says the appeal is partly efficiency, partly expectation. “Many organisations are looking for an easy-to-use messaging system, allowing them to quickly and easily communicate internally – especially businesses that employ Generation Z workers who tend to prefer messaging apps to email entirely.” Few who use these apps, however, may be aware of the possible security risks. Developing an app with tight digital security costs a lot – the licence must be purchased for the software and implemented by a team of developers. Tight security demands a lot of computer power as well, so they’re large to download. And the market is overflowing with CPU-friendly apps that don’t cost a thing. So with the vast majority of users simply sending banal information between themselves and a recipient, there’s a convincing argument to cut security costs. But for businesses, that isn’t good enough. The problem with IM apps is partly that they’re not built to defend against serious hacking attempts. However, it’s also the way they are used – for quick and easy communication. People use them to send important information, in what they consider private space, akin to an intimate conversation. But if they’re discussing work, a leak could be catastrophic to a client relationship or a fellow employee. There’s the potential for more serious mishaps as well. Last year, India’s largest biometric ID system in the world, Aadhaar, suffered a major data leak. It’s believed the biometric information was leaked by Unique Identification Authority of India (UIDAI) employees who had been laid off, but who were still active on work-related WhatsApp groups, and they’d

march/april 2018 63

Technology

Many organisations are looking for an easy-to-use messaging system – especially those that employ Generation Z workers, who tend to prefer messaging apps to email entirely

lives are under siege by their work life. “Companies must have this discussion with their employees.” she says. “They should ask them what tools [apps] they’re using, and be clear about the reasons they need to know. “It’s important to keep them in the loop: if you don’t inform them and you don’t ask for co-operation, you’ll then get resistance, and they may just continue to use them.” With this information and employee consent in place, a strategy can be devised. Are the apps employees use risky? Can

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your IT department prescribe better tools, perhaps an enterprise solution that allows staff to talk freely but in their relevant silos? Scott Kenyon, a Security Architect at Sure in the Channel Islands, says ‘hygiene’ is the key to good strategy – companies need to ‘wash behind their ears’ and make sure they don’t miss any important aspects of building a digital security strategy. Menting says businesses should consider appropriately segmenting communications, so “you don’t share all your core, sensitive data with your interns”, for instance. Kenyon concurs, adding: “Mobile device management tools, such as VMware AirWatch or Microsoft Intune, are becoming the trend for ‘bring your own device’-type environments. These segment business data into controlled areas, from personal to business, and stop the bleeding. Users are only then available to see data that it’s crucial they see. This helps prevent inadvertent leaks.” If you’re shopping around for an enterprise app, it’s important to find out what security they use. Wire’s Duric believes end-to-end encryption – where the sender and recipient are the only ones to be given the ‘keys’ to unlock a message – is advisable for businesses. Popular enterprise apps such as Slack and Skype for Business, don’t include this, though they do take other precautions. The task of tracking down who’s messaging whom in an organisation, and what exactly they’re sending, may seem overwhelming, but developing a strategy need not be. Speak to employees and come up with a strategy that’s relevant to the organisation, is flexible and can be adjusted in future. And once all that’s in place, feel free to send those messages. n JACK FLANAGAN is a freelance technology writer

What about GDPR? The General Data Protection Regulation (GDPR), which comes into force in the EU from 25 May, doesn’t mention instant messaging particularly. However, it does concern data shared by smart appliances. Whereas today we think of messaging from phones, tablets or desktops, tomorrow we’ll live in a world where cars, planes and public electronic interface kiosks can all be used to send a message to a loved one. Michela Menting, Research Director at ABI Research, says: “It’s definitely going to have a big effect. A lot of enterprises are going to need to have this visibility into their shadow IT, because if information leaves an enterprise, that could then potentially be stolen or lost. “The GDPR is a little more wide-ranging. Under the new definitions, it could also include data that’s being shared with other smart appliances. “Say you connect your phone to a smart printer, a smart kiosk or a medical appliance, and they’re exchanging information, these may contain driver information, health information about a patient or, indeed, an enterprise. Businesses are going to need to think about that – where is this data going, outside of what we consider traditional computers? [The proliferation of chat services] presents an even bigger challenge for enterprises to keep track of their data.” Importantly, Menting adds, don’t just ban these apps outright in an attempt to cover your bases. If employees find they can’t send or share something, they are liable to just find their own solution.

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BUSINESS LIFE

Opinion

Electric vehicles – the calm before the storm? Christopher Scholefield, Partner at Viberts in Jersey, looks at some of the legal implications of what may be the biggest shake-up of transport in the Channel Islands for decades HEAD NORTH TO England, buy an electric car, and the government will give you a £4,500 subsidy. Do the same thing in France and the subsidy is €6,000. In Jersey, the best deal on offer has only ever been a subsidy of £300 towards the cost of an e-cycle, while in Guernsey a similar scheme remains under investigation. Perhaps that explains why the number of electric vehicles (EVs) on Channel Island roads remains exceptionally small – roughly 200 in a fleet of 125,000 registered vehicles in Jersey and 144 in a fleet of 83,000 registered vehicles in Guernsey. This is surprising given that, for local motorists, ‘range anxiety’ has never been an issue. It’s too soon to say what fate awaits internal combustion engine (ICE) vehicles. Surely they will eventually be banned from built-up areas, commuter routes and near schools. So the off-road capabilities of the glossy crossover SUV in the dealer’s showroom may soon seem less important than the fact they’re banned on environmental grounds from going where you need to go, when you need to go there. No legal issues arise here: you’re free to buy that car or not. The dealer makes no promises in the contract of sale about what the future may hold for it. Even those enticing you to trade in a dirty old diesel for a clean new one make no contractually binding promises about how long any vehicle with an exhaust pipe will be welcome on our roads. There are, however, wider legal implications arising from the coming changeover that go well beyond changes to the climate of opinion. Getting power for your car will no longer involve a visit to

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one of our islands’ existing filling stations. You’ll expect to charge up whenever and wherever there’s power. Here are just a few of the legal issues flowing from that.

PLANNING AND TAXATION For residential areas with predominantly on-street parking, will the future see charging points installed along the whole street? That might be a design challenge in historic and other sensitive areas, such as sea-front car parks. Work is already being done in some communities to investigate adding charging stations to existing lamp standards. Leisure attractions will want

Given the loss of tax income EV s will cause, we must expect a return to road tax windscreen discs, charged on the grounds of congestion, which even EV s cause

Illustration: Thinus Slabber

to seek permission to install the required charging infrastructure as a means to cater for their visitors. As petrol sales fall, change-of-use applications from garage forecourts to residential are bound to follow. Indeed, the smart money may already be on properties currently blighted by an adjacent filling station, which will eventually be making way for residential redevelopment. Areas currently bothered by noisy and smelly traffic will start to look more appealing to developers when the only disturbance suffered from passing vehicles becomes the swoosh of rubber on tarmac. With regard to taxation, the States of Jersey made £21.8 million in 2016, and the States of Guernsey made £19.4 million in 2017 out of vehicle fuel duty. EVs will dry up that income stream, which will have to be replaced. Taxing electricity used to power up an EV, as opposed to, say, running the fridge, doesn’t look practical. Jersey hits gas guzzlers on registration with a vehicle emissions duty exceeding £1,900, whereas Guernsey charges just £42. But paradoxically it’s Guernsey that has a healthy population of highly efficient, second-hand, Japanese domestic market micro cars because it doesn’t insist that all Guernsey-registered vehicles have EU-type approval. Given the loss of income EVs will cause, we must expect a return to an updated annual road tax windscreen disc, charged not according to emissions but on the grounds of congestion, which even EVs cause. If the States actually wants to address sedentary lifestyles and congestion rather than simply replacing lost revenue, then

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Opinion

it’ll have to consider road pricing, which GPS technology has made much more easy to operate.

HOME BUYING AND EMPLOYMENT Homes with off-street parking, allowing easy domestic charging, will command a premium. If you run a cable from your front door across the pavement to your car, how long before someone falls over it and sues? For new blocks of flats, the declarations of co-ownership or articles of association will need amending to provide a regime for the installation, access to and

consumption charges of on-site charging facilities. Some buyers will be put off flats where this hasn’t been sorted out. Luxury flats may offer one charging station per unit, but further downmarket a rota could be needed. Existing co-owners, keen to protect the marketability of their properties, would be well advised to set up a sinking fund to pay for the required facilities and to agree rules for their use. The EU is working on regulations to oblige new residential units to have access to a charging point, so the writing on the wall will soon be joined by a charging station.

The islands employ hundreds of trained mechanics who maintain ICE vehicles. Since EVs have so few moving parts, this sort of work will either change beyond recognition or simply vanish. Employers will need to update and then scrupulously apply their redundancy policies. Those keen to retain the best staff will want to offer contracts providing generous in-work retraining opportunities. Astute motor franchisees already know which manufacturers are no longer at the forefront of technological change and will seek new suppliers. Anyone remember Rover or Saab these days?

COMMERCIAL LEASEHOLDS AND RETAIL In recent years, there has been a coming together of petrol stations and food retail. For some reason, the public hasn’t been put off buying food stored and offered for sale right next to the fumes and exhaust gases of a busy forecourt. As demand for petrol reduces, so this model will need to be reappraised. Convenient locations offering abundant parking will survive. Those also offering a quick charge for their shoppers’ EVs will be better placed, but both will have lost their USP – access to the pumps. Will some run schemes allowing only loyal customers to have a free power top-up, or will free power for all become the norm, just like free parking? Commercial landlords owning properties of this sort will need to reconfigure them, and their power infrastructure, if they want their tenants to stay put and continue trading successfully. The smartphone revolution was swift and all-embracing. Because they’re a replacement technology not a new one, EVs will take longer, but as Nicola Sturgeon said when announcing Scotland’s 2032 changeover: “To succeed, Scotland must lead change, not simply trail in its wake.” There’s a lesson there for the States in both islands. Are we using our autonomy constructively or has the blame culture reduced our governments to lamely observing innovations elsewhere and then copying them? It was the Isle of Man that rushed to rewrite its traffic laws to be a test bed for autonomous vehicles, not Jersey or Guernsey – so guess which Crown Dependency is now the talk of the Washington Post and has chums in the Googleplex. Inevitably, however, whatever our States do or don’t do, private citizens will think through what’s coming and lay their plans accordingly. n The author acknowledges the kind help of Colin Le Page of the States of Guernsey’s Traffic and Highway Services Department in supplying many of the Guernsey statistics used in this article, but the opinions expressed above are the responsibility of the author alone.

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THE AGENDA The Agenda is compiled by Businesslife Fashion and Lifestyle Editor, Thom O’Dwyer, with additional material by Danny Cobbs

in full bloom

1. SPLASH OF COLOUR Since 2000, Pantone – the US-based corporation famous for its Colour Matching System – has chosen a Colour of the Year, representing the zeitgeist in design and stylish living. The 2018 colour is a ‘dramatically provocative and thoughtful’ purple shade called Ultra Violet. Always quick off the mark – even before the Christmas trees came down – the UK’s largest online window blinds retailer, Blinds2Go, was churning out a wide range of blinds utilising 2018’s super colour for both solid and print blinds. The pretty, but particularly modern, Hadley Linen Blooming Violet Roller Blind, pictured here, is just one such example. Shown in a luxury bathroom setting with all the perfect luxury components – most notably the gorgeous copper roll-top bath – this light-filtering blind in Ultra Violet, pinks and greens packs a springtime punch, while the watercolour style of the floral pattern brings harmony to the design. And despite everything being custom-made, you can expect to pay 70 per cent less at Blinds2Go than you would on the high street. From £26.95, www.blinds-2go.co.uk

INSIDE THE AGENDA: ACCESSORIES, CARS, FASHION, FOOTWEAR, FRAGRANCES, FURNITURE, HOMEWARE, LIGHTING Everything you need for a more stylish life.

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THE AGENDA

2. BLOOMING LOVELY Add some springtime delight to your home with these stunning recycled glass bulb vases by Finch & Crane, a family-run business based in a small wine-making village in the south of France. The vases come in three colours – purple, blue and clear – and are perfect for forcing beautifully scented hyacinth bulbs. Simply place the bulbs in the cup, root end down, so that the base is barely touching the water; position the decorative vases on a bright windowsill; and then watch as they begin their blooming ballet! Periodically change the water and keep the level at the base of each bulb. Who said you didn’t have green fingers? £12.95, www.finchandcrane.com

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3. SPRING FLOURISH Want to add the finishing touch to that formal spring outfit? This gardenia tie pin by Lanvin will definitely lend your tailored ensemble a stylish flourish for any occasion, be it a royal affair or a mate’s humble springtime wedding. Placed centre-stage on your luxurious silk tie, the tie pin features a muted chalk-grey washed satin and cotton gardenia, which is secured with a silver-capped fastening. Going formal has never been such fun! £120, www.matchesfashion.com

4. LOOKING ROSY Dolce & Gabbana has reinterpreted the classic court shoe with a large dose of its signature flashy bravado. Crafted from plush black velvet, and embellished with appliquéd pink roses and eye-catching crystals, the shoes also feature the terribly au courant block heel. The chunky shape took centre stage last year and shows no sign of fading as the shoe-du-jour. Far superior to vertiginous skyscraper stilettos in comfort, walkability and cutting-edge cool. Wear these show-stopping shoes with a simple little black dress, ladies, and let your feet do the talking. £945, www.mytheresa.com

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5 5. POCKETBOOK POSIES The amazingly jazzy shoulder bag by Etro, pictured here, has been handcrafted in Italy, using the finest calf leather and the fashionable boxy shape that’s been cropping up on all this season’s catwalks. Its terribly on-trend shape is further enhanced by a kaleidoscopic, optical display of wildly abstracted florals in dazzlingly bright hues. The clean, eye-popping graphic design echoes the strong funky 60s mod vibe that the fashion pack can’t get enough of. Internal details for this ‘gotta have’ bag include a soft-as-butter suede lining, two internal compartments and another internal slot pocket. Functional, fashionable and simply to die for. £1,220, www.mytheresa.com

THE AGENDA

6. THE LIGHT OF SPRING The unique, modern Maskros Dandelion Pendant Lamp by Ikea, shown here, was designed to imitate ghostly airborne dandelion seed pods as they aimlessly float heavenwards on a lazy sun-drenched day. Lighting up the home, use it to dominate the large area of a loft-style living room or install a row of three in a chic-yet-minimalist dining room over a long, recycled refectory table. The lamp playfully mimics the dandelion’s natural lighting pattern onto your walls and ceiling for a stylishly low-key and romantic lighting effect. Available in two sizes – 55cm and 80cm – this stunning stainless steel and paper lighting fixture requires simple home assembly. £50/55cm lamp; £90/80cm lamp, www.ikea.com

7. FLOWER POWER Marta Marques and Paulo Almeida are the dynamic design duo behind the eponymous label Marques’ Almeida. Having both studied at London’s renowned Central Saint Martins art college, they launched their label in April 2011. Then in 2015, they won the prestigious LVMH Best Young Fashion Designer Award. Their highly individual aesthetic was originally built on that hardworking American classic – denim. Yet their collections have evolved into a wide range of men’s and women’s separates inspired by a strong sense of individualistic personalised power. The oversized T-shirt in an ornate floral brocade, pictured here, is inspired by the extravagant Baroque style of the 17th and 18th centuries, with touches of chinoiserie opulence. It’s crafted with a round neck and a loose, comfortable, easy fit with box-cut short sleeves. A real bobby-dazzler. £420, www.matchesfashion.com

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THE AGENDA

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8. SARTORIAL STUNNER Haven’t got your invite to one of the Queen’s Buckingham Palace Summer Garden Parties? Or maybe that wedding in May? Never mind. The fact is, every man still needs a special formal suit for the right social occasion. And Gresham Blake – tailor to the stars, as well as the well-placed man in the street with impeccable sartorial taste – can lend a gracious helping hand. Whether it’s bespoke or off-the-peg, nobody does contemporary classical cool like Mr Blake. Be it a wedding or another special formal event, you’ll definitely stand out from the crowd in the 100 per cent silk, floral brocade, single-breasted dinner jacket pictured here. The intricate woven design, featuring a cascade of flowers and a kaleidoscope of butterflies, is exclusive to Gresham Blake, and has been sported by singer Sam Smith and actor Steve Coogan. Matching trousers and waistcoat are also available should you want the whole top-to-toe elegance-personified look. £550, jacket; £220, waistcoat; £225, trousers, www.greshamblake.com

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9. MUSICAL INSPIRATION TV presenter extraordinaire, the mega-glamorous Laura Whitmore, pictured, and Gresham Blake have teamed up with the MTV Staying Alive Foundation to support its vision of creating a world where no young person contracts HIV or dies from AIDS. Providing original media content with vital health messaging, this ground-breaking initiative supports both grassroots youth-led projects, as well as working on tackling global issues at the same time. This is really serious business, requiring serious money to back it up. In their collaboration to design a tie – despite Mr Blake being head honcho designer and tailor – it was apparently Ms Whitmore who came up with the inspiration. Which was to incorporate three of her favourite things in the design – sunflowers, the colour yellow and music. If you look carefully, the centre of each sunflower is a black vinyl LP. The pure silk ties sell for £45, but £20 of that goes directly to MTV Staying Alive. If Rag ’n’ Bone Man, David Dimbleby and Fatboy Slim can fork out for this good cause, guys, you can too. £45 (£20 to MTV charity), www.greshamblake.com

10. SPANISH ROSE-MATAZZ These earrings by Ranjana Khan have got to be the grandaddy of all larger-than-life earrings! Leaving her native India in 1979, it wasn’t until 2008 that Khan set up her now hugely successful jewellery business. She now counts Michelle Obama, Beyoncé and Taylor Swift among many other A-listers as devoted customers. She’s also worked with all the top names in fashion, including Lanvin, Balenciaga, Alexander McQueen and Armani. Yes, this lady gets around. The red floral mega-drop statement earrings – and we’re talking down to the shoulder – are just the thing for a glam night out. Very West Side Story, darling. £413, www.farfetch.com

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THE AGENDA

11. TAKE YOUR TOP OFF It’s been a while since Fiat made a two-seat convertible, writes Danny Cobbs. The most recent one, the Barchetta – based on the Punto and powered by a 1.8-litre engine – rolled off the production line for the final time in 2005, and ever since then there’s been a roadster-shaped hole in the Fiat model line-up. In fact, the only real rear-wheel-drive, two-seat drop-top of recent years has been the brilliant Mazda MX-5. Which is actually what this 124 Spider is based on. Mazda ships a virtually-complete MX-5 to Fiat’s facility in Italy, where the engineers tinker with it. It gets a different engine – a 1.4-litre turbocharged unit – tweaked suspension and distinctively different body panels, which capture the essence of the 1960s Spider. An automatic gearbox is available, but only on the top-spec Abarth version of the 124. The result is a car that’s mechanically similar but very, very different in attitude. While it’s bigger than

the Mazda MX-5, it still looks – and feels – small on the road. And that just adds to the fun, as you’ve got more space on the road to give you confidence. The turbo engine delivers a far punchier performance than the MX-5’s non-turbo units, too. Inside, the Fiat feels very well built, with soft-touch materials all around and a leather steering wheel as standard. The convertible roof arrangement is the same as in the MX-5, which means it’s very easy to operate and keeps things reasonably civilised inside once it’s up, by suppressing the noise from outside. The Fiat 124 Spider is a brilliant sports car – it looks great, is excellent to drive and great value for money. It rides well, so even very bumpy British roads don’t get in the way of the fun. And the turbocharged engine gives it the flexibility for longer trips too. It’s definitely been worth the wait. And just in time for spring drives with the top down. From £23,295, www.fiat.co.uk

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THE AGENDA 13. STAR-STUDDED SCENT Odds-on only a handful of readers will know that 5-11 March is National Fragrance Week – an olfactory celebration sponsored by the Fragrance Foundation in the UK. So, in honour of the occasion, ladies, why not treat yourself to a flowery flagon of Flora Gorgeous Gardenia Eau de Toilette by Gucci? It’s one of five floriated fragrances in the Gucci Flora Garden Collection. Gorgeous Gardenia is a faithful creation of the perfect gardenia scent. It’s a paean to the lightness of the flowering shrub’s first blossom and the addictive heady richness of it in full bloom. The result is gorgeously feminine, exuding a sultry sensuality that’s lushly enticing. Think Elizabeth Taylor. Interestingly, the now defunct fragrance Jungle Gardenia was the great lady’s favourite perfume. £54.50/50ml; £110/100ml, www.johnlewis.com

12. SITTING PRETTY The majestic piece of furniture pictured above is truly a work of art. It’s just one of the handmade, fair-trade, bohemian-style, vintage furnishings and homewares you’ll find at a fascinating website – Ian Snow – kick-started by dyed-in-the-wool hippies Ian and Jackie Snow. It’s a veritable treasure trove of handmade, hand-decorated pieces, and an ode to the endeavours of craftsmanship. This Nakshi Chair features intricately rich and vivid graphic floral embroidery spun onto a soft, black background. The seat is covered in bright fuchsia-pink crushed velvet, the very colour that fashion doyenne Diana Vreelend claimed was “the navy blue of India”. The slim legs are set at an angle, adding a jaunty air to the generously sized seat. Crafted by a small but thriving family firm in Jodhpur, India, the artisan’s handiwork is beyond beautiful. £895, www.iansnow.com

14. FUNKED-UP FLORALS Fashion’s been flooded with floral for a few seasons now. But this spring, the blooms have turned away from the romantically demure florals of yore to the English garden variety, but in seriously psychedelic colours. This year marks the 50th anniversary of iconic Italian fashion house Etro. And its spring/ summer 2018 collection exuded a festive, free-spirited attitude, featuring vibrant, swirling and mind-blowing prints. Pictured here, the below-the-knee hemline has a certain ladylike appeal, while the bodice has been artfully rusched, emphasising an enticing figure-flattering design. Team it with strappy heels and an offbeat shoulder bag and it’s power petals head to toe. £745, www.mytheresa.com

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THE AGENDA

15. RAZZLE-DAZZLE ’EM Following closely on the heels of what’s happening print-wise on the womenswear catwalks, the most memorable prints for the guys are mixed blooms that dip into the Swinging Sixties disco-style archives for inspiration. The cotton blend bomber jacket by Versace Jeans, pictured here, pitches graphic Warhol-esque flowers in razzle-dazzle bright colours against an after-hours black background for maximum retro-rave impact. The slouchy All-American jacket style has been enjoying its heyday for the past couple of years – and it’s not going away without a fist-swinging fight. £345, www.farfetch.com

17. SCENT OF SAKURA Not to be left out during National Fragrance Week, a little dab of Somei Yoshino Eau de Parfum by Berdoues will do you nicely, guys. From the esteemed French perfumer founded in 1902, this fresh, refined, lightly floral men’s fragrance takes its inspiration from the famous Somei Yoshino cherry tree. It’s the most iconic and revered flowering tree in Japan, producing the spectacular pale pink cherry blossom known as sakura. The blend of essential oils creates a balanced, sophisticated, soft, harmonious floral bouquet that’s perfect for Metro Man. In fact, the scent is apparently being worn by both sexes. Part of the brand’s new Grand Cru Collection fragrance range is the brainchild of Sophie Berdoues, the greatgranddaughter of the House of Berdoues’ founder. £70/100ml, www.johnlewis.com

16. SOCIAL BUTTERFLY This madly covetable, embroidered tablet and laptop case by Gucci is fancifully adorned with this season’s butterfly motif, coupled with a bold ‘L’Aveugle Par Amour’ slogan – ‘Blind Love’ in plain, old-fashioned English – as well as sweet little floral posies. It’s all part of Gucci’s tongue-in-chic wit. The piece is just as practical as it’s stylish, boasting an ultra-spacious interior that can fit your indispensable tablet with ease. It’s also finished with a top-zip fastening. What’s not to like? it’s Gucci! £445, www.farfetch.com

18. TYPICALLY TROPICAL Since launching her first menswear collection in Paris in February 2016, Stella McCartney has attracted a massive fan club of men drawn to what the designer calls her ‘seasonless wardrobe’. Both her men’s and women’s collections promote sustainable luxury fashion, while always adhering to the brand’s ethics of being leather and fur-free. Having cut her teeth working on Savile Row, McCartney’s expertise and fuss-free tailoring are part of the brand’s DNA. However, she always manages to inject a sense of tongue-in-chic fun as well. Pictured here is a snazzy, multi-coloured, tropical hibiscus floral print, 100 per cent cotton shirt. Cool, but not too compromising. £330, www. farfetch.com

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

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