Guernsey Finance Chief Executive Rupert Pleasant reflects on this week's Guernsey Private Wealth Forum webinar.
What were you doing in lockdown?
In the family office sector, across the world, it appears that high-net-worth individuals were taking the opportunity – perhaps for the first time in a long time – to sit down and consider their wealth and how it was structured.
And the ramifications of those thoughts were unveiled at our Private Wealth Forum event this week.
I was pleased to be joined by Alistair Morgan, CEO of MDR Mayfair Group, Arabella Murphy, Director at Propitious (London), and Guernsey-based Andrew Niles from Charter Consulting, for a wide-ranging discussion on the impact of lockdown and other potential disruptors for the family office sector.
So what have we seen?
Greater involvement from the heads of the family in their day-to-day activities and longer-term succession planning.
As Alistair said, there was a renewed focus on whether succession planning would stand up to a once-in-a-lifetime threat, such as the pandemic.
"There's nothing like a good disaster, a good panic, to stress test your plans," he said. "It's never until that happens if you know if they're really going to be robust enough.
"This is a golden opportunity for the families and their advisers to have those slightly more strategic conversations that perhaps they had been putting off, for whatever reason. Now's the time to have a go at them."
Andy pointed out that it was becoming increasingly important for advisers to be proactive, or at least very reactive to client requirements.
"Guernsey has actually showed itself to be very good over the past six months, not only at a government level but also being able to ensure that we can continue to do business. In terms of how we present ourselves to clients, I think that Guernsey has done well," he said.
Arabella said that she had seen family extending their circles of trust, bringing in more family members and a second tier of advisers, and streamlining of structures, bringing structures together in some way or into the same location on occasion.
2020 has also been a year of geopolitical uncertainty. How do family offices and their advisers react?
"It's a very difficult and dangerous game to try and jurisdiction hop and try to second guess what might happen on the geopolitical scene," said Andrew.
"The families who have benefited have been the ones who have tended to choose the robust jurisdictions. We encourage our clients to choose their jurisdiction sensibly and obviously Guernsey is one that has been well-established and has the full suite of support services. That has held it in good stead and will continue to do so."
Arabella added: "Guernsey is very much on the favourite list of places to look at. It has a very strong reputation for being secure, well regulated and very well connected. And that's what we need to provide with all those different factors at play."
Economic substance has grown in importance over the past couple of years. How should family offices react?
Alistair was reassuring about the status of most family offices in this regard.
"As long as families have got a proper corporate governance structure in place, and their professional advisers are doing the jobs that they should be doing, then there's nothing to worry about."
Other issues we touched on were remote working, business continuity, cyber security, sustainable investing, and corporate governance.
We titled the webinar "Emerging from Crisis" and I would take this opportunity to highlight just how strongly Guernsey has emerged from the pandemic, and the issues we spoke about this week.
I quoted a private wealth professional to conclude our discussions: "The way the island has handled and responded to the challenges of Covid-19, and how we've been largely unaffected, has undoubtedly caused people to reflect and consider Guernsey as an attractive destination for family offices. Covid-19 has actually been a tangible example of the security and stability Guernsey can offer."
Originally published by Guernsey Finance, October 2020
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