Dominic Wheatley stood down as Chief Executive of Guernsey Finance, the promotional agency for the island's finance industry, at the end of June. In this article for the ePrivateClient Guernsey 2020 report, he looks back at some of the major issues for private wealth over his five years in post.

Family affairs

Guernsey's focus on the development of family offices in the island recognises the island's core strengths.

Those strengths are security and stability in an uncertain environment, standards of service provision, as the Guernsey industry approaches the 20th anniversary of the introduction of regulation in the sector, and a corresponding strength in depth and professionalism.

The island has promoted its abilities in the family office sector particularly in the past couple of years, and has seen interest rise in the use of the island as a domicile for family wealth.

Guernsey has been providing services to family offices for at least half a century. The use of Guernsey trustees, corporate structures, Guernsey-based banks or investment managers, and Guernsey fund managers among family offices established in London, Geneva and elsewhere is commonplace. In recent years we have also seen more families choosing to establish their own family offices in the island.

The island's aim now is to create the most supportive global environment for the provision of specialist single and multi-family office services, putting Guernsey front of mind of professional advisers, and their client base, for servicing private clients and private wealth.

Local developments being pursued accordingly include revisions to the regulatory regime for the island's private trust company rules, the development of a family investment company offer, and a review of the trust law.

Guernsey has a history of keeping up to date with developments elsewhere – sometimes as leaders, such as in the case of regulation, but more often as followers, building on the best of what others have done before us.

Beneficial ownership registers and privacy

Last spring the long-running issue of public registers of beneficial ownership in Guernsey came to a head in the Houses of Parliament in the UK.

Guernsey, which maintains a private register, has long resisted calls from MPs and agencies to allow public access to such registers.

Last March island politicians, joined by those from Jersey and the Isle of Man, had to argue the point with the UK on both constitutional – on the grounds of the UK legislating for the islands – and policy issues, following intervention from campaigning MPs Margaret Hodge and Andrew Mitchell.

There is still a lack of understanding among parliamentarians that Guernsey and the other Crown Dependencies are part of the solution to harmful tax practices, not the problem.

Guernsey has a complete register of beneficial ownership which is accessible to law enforcement and tax authorities on demand. The information in Guernsey's register of beneficial ownership is more accurate, up-to-date and verified than the UK's public register, which is based on self-declared data and updated only annually. Guernsey's register involves a legal duty to update details when changes are made.

We argue that public scrutiny of our beneficial ownership registers is irrelevant to their effectiveness, and undermines the normal standards of privacy of personal affairs in a way as unreasonable as it is ineffective.

We support privacy, not secrecy. Secrecy means you can hide things from the public and the authorities. Privacy can make the lives of individuals', and even their business dealings, easier, while not providing a shield for nefarious dealings. There is more than a marginal difference between legitimate and reasonable privacy from the prying eyes of the merely curious, and the rights of legitimate public authorities.

As a respected player in a global playing field, Guernsey is not resisting moves to clamp down on financial crime and tax evasion. However we believe that we have a more effective solution than that adopted by the UK. We will never compromise the high standard of our register by the adoption of an inferior model, and under our action plan, we continue to determine our own policy position.

We are absolutely committed to, and have a demonstrable track record of adhering to, international standards as they emerge. Guernsey meets the highest standards of transparency, as recognised by many international and supranational organisations.

Anyone looking to evade tax or launder money would be foolish to attempt to do so in Guernsey.


Guernsey was placed on the European Union's whitelist at the earliest opportunity in the process in March 2019. We were delighted but not particularly surprised – Guernsey has long been a jurisdiction of genuine economic substance.

Let's look at the evidence:

  • A third of our workforce is employed in financial services;
  • we have our large non-executive director community;
  • we have requirements to demonstrate that companies are "directed and managed" in Guernsey in relation to the substance activity;
  • that they have adequate employees, expenditure in the island and physical presence; and
  • that core income-generating activities (CIGA) undertaken are carried out in Guernsey.

So much of these requirements were very much "business as usual" for us, while others have had to make material changes in attempting to meet economic substance requirements.

Economic substance is now a key industry issue and firms and fund managers today look to jurisdictions that can and have met these new global standards. This plays to our strengths. Guernsey has emerged stronger and more competitively placed as a result.


ESG, and more specifically, sustainability, has been a key part of Guernsey Finance's development strategy in recent years, across all the sectors of our finance industry.

In private wealth particularly we have picked up on this trend, and we commissioned research last year on the impact of sustainability on the sector. That report indicated, somewhat surprisingly perhaps, that high-profile protests and campaigns were not yet mobilising private capital into green and sustainable finance.

Our research told us that HNWIs and family offices appeared to be looking for greater confidence in returns and in the green credentials of their investments. It appeared that a framework for unlocking this investment flow was needed, and that is something being pursued by Guernsey, initially with the Guernsey Green Fund, the world-leading regulated green fund product.

We launched the report in London with Guernsey resident and private investor Stephen Lansdown, an early convert to the cause of sustainability. "We have to make it easy to invest," he said. "At the moment you've got to search and investigate and it's hard work. People in the industry are going to need to develop ways of matching buyers and sellers, as this sector is going to be important and is certainly going to grow."

Sustainability is one of the big secular trends that will shape future profitability and losses in the financial services sector. It is the fiduciary duty of wealth managers to identify material risks and avoid large losses due to environmental issues. And Guernsey has been quick to recognise that and to seek to develop the opportunity.

Private capital and private equity

Guernsey's funds sector is not alone in clearly seeing the merging of the private equity and private capital space. Private capital has become a normalised source of financing, while the investment management sector is seen increasingly as a gateway to a direct investment opportunity.

Guernsey Finance carried out research last year which showed a desire for specialist jurisdictions such as Guernsey, which can support this convergence, are aware of the rise in private capital, the desire for bespoke structuring, and which are jurisdictions of substance.

The continued growth of private wealth, well ahead of institutional assets, has driven investment into alternatives in a search for return. The downside is a lack of liquidity, and so there has been a growing focus on building structures to offer liquidity.

Guernsey's funds and wealth sectors have responded to this changing market, introducing new structures and distribution methods as institutional clients look to democratise traditional institutional private fund illiquid products, to secure greater access to private capital.

Meanwhile private capital and family offices are looking for bespoke structures to address specific commercial, legal, regulatory, taxation or operational concerns over their investment. Guernsey's Private Investment Fund (PIF) is proving an ideal vehicle for private capital to invest in private equity.

This article first appeared in the ePrivateClient Guernsey 2020 report, published July 2020. To read the whole report, click here.

Originally published August 25, 2020.

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