Your correspondent recently visited the Isle of Man to discuss the financial services sector at the Islexpo 2018 event, with attendees striking a positive stance.

The Isle of Man is looking to use Britain’s departure from the European Union as a catalyst to promote its financial services sector post-Brexit.

The UK's decision to leave the bloc has prompted several European cities to put themselves forward to grab elements of the UK’s financial services operation, while claims and counter-claims swirl about whether Brexit will be a net harm to the financial services sector. Firms have have talked about moving European headquarters to Dublin, Frankfurt and Paris, such as the case of Legal and General Investment Management, which has actually taken the step, as reported by this publication.

A Crown Dependency such as the Isle of Man is able, so its official policymakers say, to capitalise on firms' need for options.

“I think the opportunities are massive for the island post-Brexit,” Carl Hawker, the deputy chief executive for the Isle of Man Government Department of Enterprise, said during a Brexit breakfast briefing at the Islexpo 2018. This publication attended the conference on the island.

“The department has just completed a strategic review of the insurance and life sector, and we think there is an opportunity to market the Isle of Man as the jurisdiction of choice. We have got a long-established history in the life sector market, and when people go to their financial advisors, we want them to recommend the Isle of Man. And we want clients to go through the door and say they want Isle of Man products, with their funds domiciled in the Isle of Man because it’s safe, it’s secure and a long history of service. We don’t know what the final relationship will be with the UK, and that scale of the opportunity for the island is an unknown. We just have to have it on our radar at this stage, and when it becomes a real opportunity to market products into the UK and EU, we will be taking advantage of it. But at the moment we are not at the opportunity to be sure that the opportunity exists.”

Della Fletcher, executive director of the Crown and External Relations in the Isle of Man, also spoke during the briefing about the Isle of Man going it alone within the financial services sector after Brexit.

“To make your own decisions in an island does not mean that you are going it alone,” said Fletcher. “We have got a lot of global sectors here working across a range of areas. While it is important that we look after ourselves and have our views put forward, you can’t trade in isolation. Your legislation has to be applicable to allow you to trade, your statute book has to be ready, and you have to understand your international obligations. So much of that work has taken place. We aren’t downhearted. We are actually very positive about it, the foundation which our relationship with the EU which has been in place for 40 years is about to come to a crashing demise, and we are quite sad about that. But we are also excited about this new relationship, we may not understand what that means but that will grow.”

The Isle of Man's Department for Enteprise recently announced a new agency system – in which the Isle of Man has separated several sectors including finance into agencies, which will have a board made up of government officials and financial services employees. As an executive agency within the Isle of Man’s Department for Enterprise, Finance Isle of Man is a public and private partnership, acting as a key decision maker and advisory body for the economic prosperity of the sector.

It recently appointed Aidan Doherty as non-executive chair and Michael Crowe as chief executive to lead the Finance Isle of Man Executive Agency. 

Deal unknown
Debate continues on what sort of Brexit deal the UK arrives at, or whether it chooses to quit the bloc's customs union entirely and rely on international terms set by the World Trade Organisation. However there has been a lack of visible detail what the deal will look like. This information dearth is also affecting the Isle of Man.

In May, this publication reported on a Morgan McKinley Brexit survey of financial services professionals in the UK, and found half of their companies haven't yet adjusted or are planning for any uncertainties around Brexit.

Fletcher spoke about how the Isle of Man’s plans are down to what the UK decides to do during the negotiations with the EU.

“For us our focus is where the UK will sit because our biggest trading partner is the UK,” said Fletcher.  “It is really important for us to understand the post-Brexit position of the UK. The advantages, threats and positioning so the Isle of Man can be aligned with that or be linked to it if that’s what we need. There are occasions when the UK as represented us internationally, that’s part of our constitutional relationship.”

 “But for over 25 years, we have worked with the UK, EU and a raft of governments and organisations to represent ourselves. And what is going to be interesting is that the UK is going to become a third country, which is what the Isle of Man has been for over 40 years apart from the relationship we have had with the EU as part of protocol 3. The UK will have to represent itself as a third country but it doesn’t mean that it can take responsibility for representing us. What is important for us is we start to represent ourselves, we might not always be able to get a seat at the table, but we have to make sure our voice is heard and position is understood, to do that we need to do quite a lot of thinking for ourselves,” she added.