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Welcome to the Guernsey Finance podcast page.
Our podcasts bring you all the latest news and insight from Guernsey, the global finance specialist, as well as audio from some of our online events.
Rosie 0:05
Hello and welcome to the We Are Guernsey podcast where we bring you interviews with leaders from the global finance industry as well as news and developments from Guernsey's financial services sector. My name is Rosie Allsopp, I'm Communications Director here at Guernsey Finance. For those of you who aren't familiar, Guernsey is a leading global finance centre and we work with clients and businesses across the globe to deliver industry leading expertise and products. The success of the industry here is underpinned by economic substance, political stability, and asset security and we're committed to the cause of sustainable finance and you can find out more about that in our sister podcast, the Sustainable Finance Guernsey Podcast. Today I am delighted to be joined by Paul Oliver and John Taylor. Paul is group Managing Director at Lancaster Guernsey and has more than 25 years experience in financial services with various senior management positions in Guernsey. John's currently supporting Lancaster's development overseas in the Middle East, having worked for a variety of high profile companies developing and implementing strategy. On this episode, we will discuss trends in the Middle East, and the capabilities of Guernsey as a jurisdiction well placed to service clients based in the region. Welcome to you both John and Paul.
Paul 1:22
Thank you
John 1:23
Thanks.
Rosie 1:24
Thanks for joining us. Well, Paul, let's start with you. Can you tell me a bit about yourself and your background in finance, please?
Paul 1:31
Yeah, sure. So, I've been in the finance industry for probably maybe 30 years actually. Originally, I was Investment Management trained, and now I'm chartered fellow of the Securities Investment Institute. When in the better investment markets got a bit rocky, in the early 2000s. I turned sort of poacher to the gatekeeper and I actually went to work for the Guernsey Financial Services Commission for a period of time following number years there and then left and joined Ravenscroft, stockbrokers and wealth managers, I worked up to becoming Chief Operating Officer, assisting them with launches of the Jersey office, their wealth money management arm, and also listing them publicly on the TISE (The International Stock Exchange). I've been with Lancaster for the last sort of over 10 years and continue to enjoy the challenges are working in Guernsey finance industry. And believe at the moment there are a number of opportunities for us to explore as a jurisdiction. And I am going to be born and bred and lived all my life and Guernsey.
Rosie 2:40
Paul how about you?
John 2:42
Sure. Thanks. Thanks, Rosie. Well, actually, I don't come from the from the finance world at all. But let me let me share with you my background and how Paul and I essentially came to be working together now. So my background is I have roughly about 25 years experience in a number of Business Development marketing, sales and strategy roles across the UK, Europe, and latterly the Middle East. I worked for Big Four accountancy practices, the Irish Government Trade board, Coca Cola, international law firms, and it was in the context of the latter that I came across Paul Oliver and Simon grip gray in the group, the group CEO of Lancaster whilst I was working in Bahrain, between 2012 and 2017. So during that time that I met them, and I was really impressed by Lancaster's client centric and personalised and personable approach to doing business. So when I set up on my own as a consultancy practice focusing on the Middle East Lancaster were an obvious fit for both of us, I'm delighted to say and I'm very pleased to be supporting them and developing them in the Gulf region.
Rosie 3:52
It's great to hear from you both. So it offers a range of financial services perhaps reflective of the finance industry in Guernsey. John, can you tell me why Lancaster is looking to the Middle East and pursuit of more business? And maybe a little bit about the sort of opportunities and why it's so interesting?
John 4:11
Yes, yes, sure. Thanks, Rosie. I think for me, it's that there was a clear gap really, in the market for independent, impartial, impartial, and sort of flexible advice. And there's a lot of companies that are very large, and have become perhaps a little bit unwieldy in terms of how they manage client relationships. Because Lancaster deliberately keep their client numbers low, it means that they can effectively and efficiently serve client needs. I think that's really important when it comes to the Middle East, which is very much a face to face culture, different from Europe, and founded on building those those relationships based on trust. So, in recent months, we've witnessed a number of approaches and requests for support from clients, who for whatever reason, how big I'm perhaps disillusioned with current providers, I have issues such as transparency, fee structure communication, and that's all the areas that Lancaster really excel in. So for me, it was a very obvious fit to, to be working with them with Lancaster in this part of the world.
Rosie 5:16
Interesting. Paul what about you? What's your take on that?
Paul 5:20
Yeah, so if I if I wind back a little bit in terms of Lancaster's approach, where we're solely independent 100% Guernsey owned. And so you know, we can, we can sort of pick and choose with the markets and the clients we look at, we just gives us that flexibility to look at opportunities. And we've been going out to the Middle East for, you know, nearly coming up in the 10 years now, sort of eight, nine years. And when we first started, we thought we'd do a sort of regular Strategic Development Review of markets and the clients that we look after. And as John said, we we are a small number of clients, we look after by design, because ultimately, it's about customer focus and service. And when we looked at the Middle East in terms of opportunities, the generational shift in wealth, succession is being passed down from from patriarchs and matriarchs, but they've made their money in operating businesses. It sort of fitted with our ethos in terms of, as John said, the relationships and the face to face building off those long term relationships and looking after the families, which is what Lancaster is a sort of quasi family office, you know, boutique offering. So yeah, we've been exploring it for a number of years. And so we've got a sort of vast number of contacts in the network, intermediaries, lawyers, and direct face to face clients now. So and it's just building out from there, and with the way that now that Saudi is opening up as well, that there is there's a massive shift in opportunity in terms of looking after those families, and protecting the assets for the next generations.
Rosie 7:16
So, John, what are the benefits of using financial entities like Guernsey for high net worth families and individuals who are looking to develop a financial legacy in an ever evolving global climate that we find ourselves in?
John 7:30
I think Paul is probably closer to the to the Guernsey picture than than I am, to be quite honest with you. But it's been very clear from our, from our recent trip to the Middle East, literally only two, three weeks ago that Guernsey has a high reputation as a finance jurisdiction. I think there's a number of reasons behind that. I mean, the obvious ones are tax neutrality, well, good regulation, a stable place to do business. But I think in practical terms, the timezone is not too far away from the Gulf, there is a small enough community to put people to know each other in terms of providing a full client service. And when I mean that, I mean, wider than the services that are provided by just Lancaster. So we're talking tax legal and other private wealth services. And I think that's sort of, you know, that that fact that it is it is close, it is well regulated, and also has legal precedent to, to follow its own kind of court procedure, if you like, means that Guernsey is actually seen as a very favorable location for for families for the region.
Rosie 8:32
Paul is that, how you see it as well?
Paul 8:35
Absolutely. Yeah, I think it's, you know, when we were out there a couple of weeks ago in Bahrain and and Dubai, and I think Guernsey has really come to the fore in terms of that sort of top level finance centre, pretty much fully compliant with the FATF AML recommendations, OECD, you know, whitelist and with the fact that we've been doing trust and corporate work for a number of years, and the laws and regulations that Guernsey created are now being replicated in Dubai, you know, DIFC trust law and foundation law is pretty much modeled on the Guernsey standard laws, which is a huge compliment for Guernsey and as John said, the the precedent with the number of cases that have been tried and tested through the courts in Guernsey give people in the Middle East that sort of comfort that structures work for the for them and there is a protections. So yeah, I think it's, it's really up there in terms of when you're looking at finance centers, a stable government, tax neutral, well regulated, it's it's coming to more and more to the fore in terms of what clients are looking for, because they're looking for that calm. For those, that that somebody is looking after their wealth and passing that down for legacy purposes to their family and next generations,
Rosie 10:09
it's you know, that we're ticking the boxes. John, how have families and financial advisors approached the ongoing political instability but you're being felt across the boat? Do you think there's a move towards centers like guarantee, you know, for the reasons that we just discussed earlier, to mitigate risk?
John 10:29
Yeah, very, very much. So, Rosie, I think the, you know, the political volatility, the economic concerns, at the moment have focused people's minds in the region on making sure that there are that they are protected. And so I think there's a, there's a move to, to looking at offshore jurisdictions. Certainly Guernsey is right up in that list, by the way, it's, um, I think, just going back to the previous question that we were discussing, you know, the, the, the fact that the marketing, Guernsey is not saturated, such as other offshore jurisdictions, I think that also helps, because it's easier for clients to navigate their way around when there's, you know, when it's easy to do so, frankly, and it takes that sort of complexity and heavyweight aspects to it out of the equation. I think, with the, with the ongoing political instability, you know, we are seeing clients wanting to use offshore jurisdictions more and more, and making sure that their assets are protected for future generations. There's also a couple of things happening in the Middle East that are probably specific to that region in terms of how family businesses are structured. And I think, you know, typically, the separation of corporate from family would not have been necessarily that strongly considered. I think that's, that's now coming more into the four. We've also got generational shift and generational sort of inheritance. So that's a next generation is coming to the coming to the front of the front of the queue, if you like and also having different designs on what the business might be doing in terms of, you know, core core operational activities. The other aspect to this, there's also tax being introduced into the region. So we've now got a 10% corporate tax in a couple of Gulf countries UAE included, and that also, you know, is giving people the impetus, and we're talking to one very large company at the moment that's based out of the UAE, around taking some of their operational Vince's through Guernsey trucks, and that's, that's a very obvious move to save them. That 10% tax.
Rosie 12:32
Are you seeing a similar thing? Is there a move towards centres such as guarantee?
Paul 12:36
Yeah, I think. Yeah, going back to my previous point, about the sort of well trodden path and the longevity of the trust laws in Guernsey. The conversations we were having a couple of weeks ago with families, questioning the sort of putting their assets into a trust for their next generation and understanding how that will be protected, and also challenged from a from a sort of Middle East court perspective, given the SRA laws in place, you know, different different to here. And I think, given the fact that there has been precedent, test cases, through the royal court in Guernsey, where it's made very clear that they will uphold the sanctity of a trust arrangement. So I think that that really stands us in good stead for, you know, assuring clients that, you know, it's a big thing to pass their assets to somebody completely new, to manage on their behalf in a trust. But if they understand the reasoning behind it, and the fact that it is, in Guernsey, we've got we've got a very sort of safe environment, well regulated jurisdiction that is policed and, and governed with with the Royal Court protecting, if there are challenges to come. So yeah, I think that that is it's a really positive for Guernsey.
Rosie 14:01
Yeah, I think you're right, it's good to know that we are that Guernsey is known as a safe pair of hands there. And as the world continues to move forward, following the pandemic, where we're dealing with other issues, such as the invasion of Ukraine and resulting wealth, migration of high net worth individuals, Paul can you describe how your role has changed over the past few years?
Paul 14:27
Yeah. So it's been really interesting actually, during and after the pandemic, from from business and personal perspective, really, you know, across the board, people we talk to entrepreneurs, mothers, fathers, children, their grandchildren, that they've had time to think about things and what's important to them. And the fact that life is short and so people want to enjoy their time. And therefore, we've seen a real increase in inquiries from high net worths that are wanting to put their refers into order, and then organise it, you know, their legacy for the future. They've built up businesses over many, many years. And they don't want to see that that ruined overnight, you know, you know, with with the Ukraine conflict and other issues, there's a real danger that things are just unstable where they are. So looking to Guernsey and to Lancaster to assist with helping protect that business for the next generation is really key. So we've had a lot of sort of ongoing discussions. We don't do tax like us doesn't do you tax and legal advice, but we work with a lot of well trusted people in our network. So two clients come with their advisors, and we sit down and we work out what is best for them, in terms of putting that into a structure that is going to work best for them and their family, every client is different. Like this, we don't sell a particular product, and we don't say, you know, you need to have the trust, or you need to have a foundation, it's about working with them and, and understanding their long term objectives, and trying to put the best structure in place for them for the long term. So that it is there, and they then can pass that wealth down. So yeah, it's it's really changed from the outside. And then also in, you know, from a, from a local staffing perspective and everything else, you know, that we've got hybrid working flexible working practices, and the need for us all to be more empathetic. And it all comes with challenge. But, you know, we look at things flexibly and nimbly, to just try and sit back and actually understand what what the client is looking for and how we can help
Rosie 16:50
It sounds like that personalised approach really resonates. John, how about you? How has your role changed in the past few years?
John 17:00
Well, I think just reinforcing what Paul's saying there, you know, I think we've all had to adjust to sort of different ways of working, but it all comes back actually to not getting the kind of client standard slip and client service. And I think, you know, in these times of volatility, clients are really looking for assurance, they're looking for comfort, they're looking for communication, as well. And it's really important to maintain that even, you know, when we were going through circumstances, such as lockdown, it was even doubly important to do that, frankly, to make sure that the clients felt, you know, felt looked after, and, and listened to. And it's particularly important in this region where there isn't sort of a ready made, you know, sort of solutions, it's much more crafting by design and bespoke servicing of the client. So I think that that, again, lends itself really well to Lancaster's offering, it's not a product kind of menu, if you like, it's actually understanding the destination that clients are looking to get to, and then coming up with a solution that meets that, that meets that need most effectively.
Rosie 18:07
Actually, that kind of leads me on to my next question about how family wealth planning differs for clients. And it's a from places like Europe, to those who are based in the Middle East? And how do advisors like yourself balance the opportunities and the risks of those two, you know of the Middle East versus Europe? John, I thought I could ask you that one first. And then maybe, Paul, you could give me your take on that?
John 18:36
Yeah, but by all means, I think, you know, with every kind of client inquiry when you're when you're deliberately giving your client numbers small to guarantee that excellent customer service, so you've got to be very selective about who you work with, frankly, and, and that's, that's, that's part of my customers approach is actually not taking on every single client engagement, it's got to be the right engagement with the right client. So you know, it's, it is all about managing that, that risk of balancing the opportunities that come from both the Middle East Europe and other jurisdictions, frankly, but the key, I think, really is looking for clients that probably have complex needs that have evolving needs that have multi generational families that will require, you know, regular activity beyond, you know, the sort of the sort of the trust administration aspects of the role, which is, which is core, but which I think also, you know, there are there are additional services that can be offered when you're providing a bespoke Service.
Rosie 19:38
Paul?
Paul 19:39
Yeah, I think that's absolutely right. We don't have a length doesn't have a specific client. You know, we've got a flexible approach and look at things on a case by case basis. So whether that clients in Europe or whether they're in the Middle East, there's there's differing risks with the took in you know, different jurisdictions cultures, rules, regulations, tax inheritance forced their ship, you know, it's all the criteria that needs to be looked at in terms of how can we help? And can we help? You know, with given the resource that we've got internally, whilst balancing that with the regulations, the rules, the obligations that Lancaster has to go through, it's all ego, there's no sort of exact science in the approach, I think a lot of it comes down to gut feel, and also relationship. It's very much how we work. And if the client wants to work with us, as opposed to to another licensee. It's building that rapport and trying to understand how are they going to what are they going to need? How are they going to want it delivered? We've got a set of senior staff and the board meet regularly to consider opportunities. But because we're small, we can have those discussions fairly quick and flexibly. So the clients, you know, with, they're not waiting around to sort of say, whether we can help or not. But yeah, so if I don't, I don't think there is one set of rules for a Middle East client as opposed to European client, they all come with their their differing pros and cons and risks and, and the like. So it's just trying to work through with them and their advisors to get the right structure in place. And make sure we get the balance right.
Rosie 21:38
It all comes back to that sort of personalised approach, doesn't it?
John 21:41
Yes.
Rosie 21:42
So here in Guernsey, we are very proud to be a global leader in sustainable finance. And we've noticed that ESG is something that many, many more investors are interested in. Paul what's your experience with your clients? What do they tell you?
Paul 21:59
Yeah, I mean, it is, as you say, it's a massively growing area. And we do have discussions, not every meeting and not every client, but certainly the larger clients that we see it, we've got operating businesses in various jurisdictions, where they've got to comply with local laws and rules, are asking the question around it, and how it works so that they can comply with directives and bits and pieces. I think that there is a difference, I think, between the sort of small and larger clients, and in terms of their focus, but we definitely seeing a growing area. You know, and we will continue, as new technologies come out. And there's more efficiencies, I think it's going to become more and more to the fore. So yeah, we are aligned to it, nd it's great that Guernsey are sort of really leading the way in terms of the products and, and the regulations in this way.
Rosie 23:07
John how about you? What's what's your experience with that been?
John 23:12
Yeah, thanks, Rosie. I think just reinforcing what Paul's saying it's I think it's becoming increasingly important. And it does crop up, as Paul said, not in every meeting, but certainly more often than it used to. I think also, the nature of the the family businesses in the Middle East are often multi generational. So a big impact on this is actually the younger generation who are putting to a certain extent, pressure on the, on the older generation and the businesses to take this issue seriously, those that also have international money or investors that are participating in those businesses, you know, also require the companies that they invest in to report on this. So again, that's also putting added pressure on this, which is which is great, because I think it's important and you know, it's it's becoming a critical differentiator as well.
Rosie 24:04
It absolutely is. And that's really interesting what you say about younger members of families being far more engaged with ESG considerations, and it's really interesting to see that also out in the Middle East as well. And I'm afraid that's all we've got time for today. Thank you so much to John and Paul, for joining us on the podcast. It's been great to talk through those opportunities that he presents to families based in the Middle East and the wider world of private finance in the region. I'd also like to thank you for listening to the podcast if you enjoyed this discussion. We've got a backlog of interviews on the We Are Guernsey podcast channel and you can check them out by searching for We Are Guernsey wherever you get your podcasts. We also have links to John and Paul and Lancaster in our show notes. So do check those out as well. And if you'd like to know more about Guernsey and its specialists financial services sector head over to our website weareguernsey.com We look forward to welcoming you back next time on the podcast until then it's goodbye from Guernsey.