ACKNOWLEDGEMENTS
We are grateful to a range of stakeholders who provided input for this study. In particular, much of the data that we used was provided by the Guernsey Financial Services Commission, without which our secondary data analysis would not have been possible.
This report represents the findings from our independent research.
Any errors or omissions are the responsibility of Frontier Economics.
GUERNSEY FINANCE FOREWORD
- services industry for more than 60 years. We are proud to be part of the British family. Our expertise as an international finance centre generates significant value to the UK across the full range of specialisms that comprise Guernsey's financial services landscape. This comprehensive and independent report, researched by Frontier Economics, details the ways in which Guernsey supports and partners with the UK, adding considerable worth to its economy in many areas.
- sustainable finance in key strategic areas, the target of a net zero economy and the provision of infrastructure across all regions of the UK. In addition, Guernsey has close working relationships with TheCityUK, the BVCA, the AIC and the City of London Corporation, which support the competitiveness of the UK and Guernsey's financial services industries.
- it clearly demonstrates the value provided to the economy of the UK by Guernsey's specialist financial services sector.
- demonstrates that Guernsey's finance sector provides a material net benefit to the UK economy and enables us to fully understand the multi-faceted links between Guernsey's finance sector and the UK and the value that is generated through Guernsey's distinctive capabilities which are not easily replicated.
- particular, as well as our leading insurance, pensions and investment management provisions, Guernsey-based funds channel £57 billion of investment into UK assets, and provide £3-4 billion of social value from these investments every year to the UK.
- when Foreign Direct Investment into the UK is falling. Not only that, as the primary economic driver of Guernsey's own economy, the positive relationship between Guernsey and the UK also ensures the continuing livelihoods of our own small part of the British family.
- how Guernsey's finance sector aligns with UK policy priorities in key strategic areas from net zero to infrastructure, and across UK regions. We hope it will be useful for practitioners and policy makers who wish to see the significant and demonstrable value that Guernsey provides to the economy of the United Kingdom.
Rupert Pleasant
CEO Guernsey Finance
1. Executive summary
Key findings
Guernsey is a major international finance centre with a strong reputation, which has recently evolved its financial services offer considerably, particularly in sustainability. Guernsey's financial services sector generates significant value for the UK economy, in key strategic areas from net zero to infrastructure, and across UK regions.
Guernsey-based funds channel significant investment into the UK economy, and currently hold UK assets worth £57 billion. This investment is genuinely additional for the UK; our analysis finds that approximately £13 billion, or 25% of these investments may not have been invested in the UK, if these funds had been domiciled in alternative international finance centres. Guernsey's contribution to the UK may also increase in the future; Guernsey-based funds' capital investment into UK assets has increased by 14% per year since 2020. The value of Guernsey's investment should not be understated, as total Foreign Direct Investment into the UK is falling.
Guernsey-based funds also enhance the UK's investment portfolio, by providing efficient access to a broader set of international investment opportunities. Our analysis finds that these investments generate returns of £7 billion per year for UK investors.
Guernsey is also an established centre for investment management, home to a diverse range of niche investment firms. These firms contribute to the flow of funds into the UK, also providing revenue generation for UK-based intermediaries, brokers and exchanges.
Guernsey fiduciary licensees support UK law firms, accountants and property advisor services, boosting the competitiveness of UK firms, and generating UK services exports. Guernsey trust structures facilitate philanthropic activity, creating further UK social value.
Guernsey's insurance sector also serves UK businesses, particularly through captive insurance services enabling UK firms to mitigate niche risks where the market might not offer coverage at Guernsey's premia. Our analysis finds that UK FTSE 100 companies may collectively save almost £100 million per year by using Guernsey captives.
Guernsey pension providers also generate significant revenue for UK professional services firms and investment managers. Our analysis finds that Guernsey international pensions generate approximately £30 million per year in total for these businesses.
These inward financial flows and provision of quality, specialised services to UK businesses are not readily available from alternative international finance centres, or easily replicable. Guernsey's value to the UK is generated through its distinctive capabilities – accumulated expertise over the past 50 years, access to international markets, strong regulation and reputation – and its strong, historical links with the UK.
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For more information about Guernsey's finance industry please visit www.weareguernsey.com.
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