Why are wealth managers looking to the Channel Islands in these tumultuous times?

By Nir Sadeh, SVP, Head of Private Banking, Butterfield
2020 has been a trying year for the wealth management diligence. evening before the COVID-19 pandemic, 2020 was already gearing up to be an consequential class with the US presidential election and the UK ’ sulfur passing from the EU. The coronavirus has naturally posed its own sic of challenges, bringing sectors and industries to a stand and undermining the long-run economic growth of established and emerging economies .
In response, investors and wealth managers have been keenly searching for markets that can offer resilience, stability and security during these uncertain times. But, given the grim nature of the COVID-19 pandemic, finding markets that exhibit these qualities while besides offering a diverse range of investment opportunities is by no means an easy undertake .
Take the UK as an case. The country has established a repute as a lead investment and wealth management hub, backed by a transparent judicial system and stable political arrangement. however, with the UK suffering the fifth highest deathrate rate from COVID-19 and presently on the brink of another all-out lockdown, we are only fair beginning to realise the long-run ramifications of the pandemic on the economy.

What ’ s more, we must not forget that the UK is scheduled to leave the EU on 31 December. At the moment, negotiations are stuck in deadlock and the opportunity of a no-deal is growing. This merely adds to the cloud of uncertainty presently hanging over the UK .
All that being said, I do not expect investors and store managers to actively seek option investment destinations at present. The UK will remain a contribute destination for global investing, and I do not see this changing anytime soon. however, at this moment it is besides helpful to consider other jurisdictions that can besides offer investors safe and favorable conditions, particularly when shielding against stream market doubt .
Nir Sadeh Based on the conversations I have been having, The Channel Islands is a area I believe will only grow in popularity over the coming years .
Guernsey and Jersey as destinations for wealth managers

When it comes to alternate economic jurisdictions, Jersey and Guernsey offer interesting shell studies due primarily to their unique government structures. Although inactive constitutionally ruled by the british crown, both these isles are categorised as autonomous “ Crown Dependencies ”. This means that they are wholly discriminate from the UK ’ s political and fiscal institutions .
With a total population of less than 200,000 people, the governments of these Crown Dependences have been able to effectively position their markets as viable international investment hub. This has been achieved through the careful construction of elastic regulative systems that accommodate, and actively encourage, flows of alien capital. Modern and progressive fiscal services legislation, which includes singular trust structures, is complemented by mature and professional legal bank funds and fiduciary services sectors. It is for this reason that Guernsey and Jersey are regarded as major asset management and wealth centres .
And over the past ten, this economic scheme has proven extremely successful. The total prize of funds located in Guernsey rose from £132 billion to an impressive £269 billion between September 2009 and 2017 ; with funds in Jersey growing from £163 billion to £265 billion over the same period. In 2020 alone, Q2 saw the sum value of regulate funds located on Jersey and Guernsey rise to £361.7 billion and £233.2 billion respectively ; representing a £20 billion rise on Q2 2019 .
What ’ s more, external investors are seeking approximately £100 million of actual estate investment in Jersey and Guernsey as part of a scheme to hedge against current market uncertainty. In my mind, these statistics alone demonstrate the longstanding popularity of these islands.

Looking for stable markets
As fiscal professionals come to terms with the uncertainty caused by COVID-19 and early geopolitical events, I anticipate the Channel Islands to remain a top finish for those seeking stable jurisdictions. Both islands have done an admirable job containing COVID-19 within their borders and are effectively open for business as usual. already, inquiry commissioned by Guernsey ’ second government shows that funds on the island are attracting increasing individual equity investment from the US .
I am convinced that the attractiveness of Guernsey and Jersey for wealth management will continue to grow. The governments of both jurisdictions are aware of their advantages and have demonstrated the flexibility and willingness to adapt to the changing needs of the businesses and fund managers based there. In doing thus, The Channel Islands provides a static political and economic environment, angstrom well as a wealth of investing opportunities .

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