Guernsey: Guernsey - A Safe Harbour In Choppy Waters

Last Updated: 13 November 2012
Article by Fiona Le Poidevin

Most Read Contributor in Guernsey, November 2017

Guernsey Finance's new Chief Executive, Fiona Le Poidevin, talks to Jennifer Palmer-Violet about the international finance centre's past successes, present challenges and future opportunities.

In a year that sees major developments in Guernsey's fiduciary sector, Fiona Le Poidevin is relishing her role as head of Guernsey Finance, the promotional agency for the Island's financial industry. 'It's a really good time because we've got so many things to say,' says the new Chief Executive, who succeeded Peter Niven in July. 'We've got the history of being a great trust jurisdiction, but we've also got new things to take forward.'

The proposed foundations law, due to be enforced in the coming months, will open the former trusts-only jurisdiction to the civil-law world, and the introduction of image rights pitches the Island as the pioneer of a modern legislative issue. Guernsey strives to diversify its financial services offering. Along with new products, it is treading fresh ground geographically. Since taking the agency's top job, Le Poidevin has already visited Russia, Hong Kong, Singapore and China, and has taken a 'fascinating' trip to Inner Mongolia. 'It's exciting but it's very demanding because you're constantly on the go,' she says. 'But despite advancements in technology I don't particularly in emerging markets where it's all about developing relationships and personal interaction. I've found it invaluable to go to these countries and speak to people on the ground.'

But while Le Poidevin is focused on breaking emerging markets, she is conscious not to ignore the Island's existing client base. Guernsey still does much work in London and the EU, and is looking at other developed markets, such as the US, too. She says: 'With the fiduciary sector threatened by increasing pressure from the UK and the wider EU in terms of offshore structures, it's just as important that Guernsey continues to protect its reputation and to educate everyone so we maintain our market share there.'

Clearing up matters

This year has shone an unwelcome spotlight on international finance centres (IFCs), particularly Guernsey and Jersey. 'We're here to promote the Island's positive qualities, the great industry that we have here and the good work that we do,' says Le Poidevin, 'but part of our job is increasingly countering these negative perceptions, trying to deal with them and to re-educate.' While politicians have been debating taxpayer morality, the EU Commission has announced a programme aimed at addressing unfair competition deriving from aggressive tax planning.

The media response has further confused the issue, and public perception is driving political will more than ever, says Le Poidevin. 'One major problem is the lack of understanding of IFCs' role in the global economy and how much places like Guernsey contribute to that,' she says. 'People are talking about the terms "avoidance" and "evasion" and there's some muddying of the water there, particularly in terms of what constitutes "aggressive avoidance". I think this is incredibly difficult to define in law, so it will be interesting to see how things develop.' Le Poidevin is confident the industry understands the Island's stance, but reassuring others is a challenge. 'We are here to facilitate wealth structures for people looking to enhance and protect their wealth,' she says. 'It's not about tax avoidance and it's certainly not about evasion. Guernsey has never condoned tax evasion.'

With this negativity a primary concern for Guernsey, Le Poidevin believes working more closely with other IFCs will help prove offshore's positive contribution to the global economy. The Crown Dependencies have started working together on financial and legal matters, something Le Poidevin is positive about.

'However,' she says, 'at the same time, we need to realise on the one hand we would have a bigger voice when talking to the UK and the EU but at the same time we are all competitor jurisdictions. We are separate legally, we have our own laws and our own tax regimes. We need to bear that in mind.'

Competitive edge is crucial, especially in light of the global banking crisis of 2008, and Guernsey is in a stable position compared with some of its rival IFCs, claims Le Poidevin. Although the Island didn't escape unscathed – initially it saw decreases in banking deposits and number of licences – it has remained relatively protected. 'Of course we haven't got any banks that are indigenous to the Island, so we're not directly exposed to systemic risk. In addition, I think that the four pillars of the industry – fiduciary, banking, insurance and investment fund sectors – have provided a breadth to the economy, which we've needed,' she says. 'I think that helps us to remain resilient in difficult times.'

And the Island has been open to a renewed focus on standards since the downturn. 'In terms of increased external regulation, to some extent all international finance centres are in it together, but I think Guernsey will have found this less of a transition than others because we have embraced a certain level of transparency, while ensuring client confidentiality is paramount. We've never had banking secrecy, for example,' she says.

Good grounding

Perhaps Guernsey's core strength is its adaptability. When HMRC dealt an unexpected blow in April, preventing a significant proportion of the Island's pension schemes becoming qualifying recognised overseas pension schemes, the business community's reaction was to refocus and adapt. 'History has shown pensions are one of Guernsey's strengths and, although the position is uncertain, we recognise we need to move on,' says Le Poidevin. And with the Foreign Account Tax Compliance Act looming, the Island's experience of adjustment, such as when the EU Savings Directive came in, will help prepare for the impact.

The growth of Guernsey's financial sector – it makes up 40 per cent of the Island's GDP, compared with around 25 per cent 20 years ago – can be attributed to the Island's adaptability and ability to develop specialist niches, according to Le Poidevin. 'That's really what has contributed to our success as an international finance centre,' she says.

With a mix of opportunities to seize and threats to tackle, Le Poidevin can build on Guernsey's 50-year reputation for trust provision. The 24-sq-mile Island now has a strong network of well-known firms – 'no mean feat in such a small place' – and a highly skilled workforce. 'From the experience we've built up over the last few years, we've got a perfect environment in which to do trust business, and the fiduciaries are supported by a pragmatic set of regulation and professional services firms,' she says. 'Despite the external pressures that we face it's important to ensure that our domestic regulation remains pragmatic and flexible because we have to accommodate the specialist services that we're providing on the Island, and we need to ensure that Guernsey continues to be an attractive place to do business.'

Number crunch

  • 50 years of trust and corporate service
  • 62,431 people living in Guernsey (2010)
  • 2,000 employees in fiduciary industry
  • 150 licensed fiduciaries
  • 40 licensed individuals who can act as
  • directors, co-trustees or trust protectors
  • GBP2 billion GDP of the Island
  • 40 per cent of GDP is finance industry
  • All of the Big Four global accountancy firms

Originally published in The Step Journal, November 2012

For more information about Guernsey's finance industry please visit

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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