Focus On Trusts by Naomi Rive

With so much political and constitutional uncertainty surrounding us in 2019, it is somewhat reassuring that the needs of the individuals and families served by the trust industry in Jersey remain relatively constant. Decades of globalisation combined with unprecedented levels of mobility means that clients, now more than ever, need access to safe harbour jurisdictions that provide them with a stable political, legal and regulatory environment in which they can structure their assets and plan for future succession. Jersey has established itself as a leader in this field and, thanks to the ongoing commitment to the private wealth sector, not even the current turmoil surrounding Brexit is deterring high-net-worth families from continuing to come to Jersey looking for legal, structuring and governance advice. That is not to say, however, that we can become complacent as there is no shortage of challenges facing the industry in 2019. For many businesses these challenges relate predominantly to their operational capabilities which are likely to become increasingly important in determining which businesses are able to continue to march forward and grow versus those businesses that are forced to become more inward looking.

With a National Risk Assessment (NRA) currently being carried out by the JFSC on the threats posed to the Island by money laundering and counter terrorism, data remains a buzz word in 2019. Consolidation of service providers and the introduction of new technology systems means that many business are trying to manage multiple applications which often don’t seem to talk to each other in an efficient way. That is surely enough to challenge the ‘mindfulness’ of even the most dedicated compliance professional, especially with regulatory deadlines looming. The recent introduction of an economic substance test may also be causing some businesses a headache. My sense, however, is that the trust and company services sector in Jersey is well prepared to deal with this most recent round of regulatory legislation but that some of the overseas territories will be facing a much more challenging year in this regard. Cybersecurity and protection of customer data is also continuing to be a key focus and is consistently named as a top challenge for financial institutions. A prominent cyber-attack has the potential to cause serious damage to an individual business and brand but also to damage the Island more widely. It is not surprising then that businesses and government are increasing their budgets year on year in an attempt to mitigate this risk.

The advent of new digital technologies means that more and more clients expect their interaction with their financial services provider to be relevant, tailored and personalised. This is also set to be a challenge for the trust sector in 2019. Forming alliances with complementary businesses to provide effective consolidated reporting across portfolio and non-portfolio assets may be one opportunity worth considering as well as the increased use of data-room facilities to provide shared, live access to key client documentation. These are some of the more welcome challenges though as they often reflect strong, value-add relationships where Jersey can really showcase the skills and experience that it has to offer. We are fortunate to have a strong and active branch of STEP in Jersey, providing monthly seminars, to help keep practitioners abreast of key industry updates. Naomi Rive Group Director, Highvern and STEP Committee Member

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