Offshore

Giving Clients Tools To Do The Job In Jersey

Tom Burroughes, Group Editor, 14 September 2022

articleimage

This news service talks to Pershing Ltd in the Channel Islands – part of BNY Mellon – on how it sees the Jersey-based financial sector evolving. An important custodian firm and provider of B2B services to wealth managers and other financial institutions, it has a ring-side seat on trends.

The “wealthier end” of clients continue to be interested in private trust companies and other structures offered in Jersey, with Middle East-based clients an important business driver for the jurisdiction, a senior figure says.

“Jersey has done a great job of increasing the product shelf over 25 years, starting with limited partnerships suitable for the professional industry, moving through cell companies for fund structures and white-labelled fund platforms, though foundations,” Mike Rothwell, director and country manager, Channel Islands, Pershing Limited, BNY Mellon | Pershing, told this news service.

The ability of the island to rapidly develop structures which are useful for international families and businesses is particularly important, he said.

“Jersey is a naturally responsive jurisdiction, gearing its regulatory and legislative development to develop solutions for its prime industry. It’s common sense really – Jersey doesn’t need to extensively legislate, for example, around automobile safety, or healthcare, and can focus the legislative programme on the industries that really matter – like financial services,” Rothwell continued.

As this news service has spoken to a variety of firms and individuals in Jersey and Guernsey, a common theme has emerged of how these places stress their ability to innovate and bring out structures such as trusts and companies that give HNW clients the tools they need. (See here for an overview of developments in these islands.)

“Jersey has done a great job of increasing the product shelf over 25 years, starting with Limited Partnerships suitable for the professional industry, moving through cell companies for fund structures and white labelled fund platforms, through foundations. Jersey is a naturally responsive jurisdiction, gearing its regulatory and legislative development to develop solutions for its prime industry,” he said. “It’s common sense really – Jersey doesn’t need to extensively legislate for example around automobile safety, or healthcare, and can focus the legislative programme on the industries that really matter – like financial services.”

And, as Jersey Finance has noted already, the jurisdiction must think globally to attract interest from all corners. 

“The Middle East is quite interesting. We are enabling firms in that region to support the needs of local and expats clients,” Rothwell said.

This offshore centre, while possessed of several advantages, has its challenges. Rothwell is blunt: “Compliance is an employment hotspot across the industry, and Jersey is no exception. There is a widespread struggle for firms to hire.” 

The employment market is a pinch point for Jersey and similar centres. 

Rothwell argued that an issue for financial firms is that finance, relatively speaking, was seen as a less desirable career area for new joiners to the employment market after the 2008 financial crash.

A separate but related point is that in the months following the end of lockdown, there is, Rothwell said, a hunger among clients to return to face-to-face meetings, even though the world of work will never be entirely the same as before Covid-19 struck.

“Younger people still expect to work in an office and be around other people,” Rothwell said. “One factor being that their home circumstances are often less amenable to home working. In addition, they are keen to have the enterprise experience, which can’t be experienced remotely.”

Pershing’s business model
The firm knows that it must deliver even more services as client expectations rise.

“Clients want us to do more and that means going up the value chain and providing further efficiency. When Pershing launched in the Channel Islands, we used to be just about custody and the clearing of trades. We have seen an increasing trend for the past 10 years where, for example, clients wanted us to deliver integrated front-office solutions for them,” Rothwell said.

Clients want Pershing to be “behind the scenes,” he said, referring to the white-labelling business model it has. 

“Over time, this has led to a strategic increase in the solution set Pershing provides, as clients have progressively sought to reduce the number of providers [vendors] they themselves work with. For many, managing multiple vendors is time-intensive and costly; creating a `one-stop shop’ suite of holistic solutions that meet the spectrum of a company’s needs has led to the creation of more valuable relationships between Pershing and its clients,” he said.

What of the future?
“Pershing Channel Islands has had a great decade, initially building a client book based on UK wealth firms and recently adding local Channel Island businesses as clients,” Rothwell said.

“We see the next five years as consolidating our position as provider of choice to Channel Islands firms, provider of choice for offshore solutions to UK wealth management firms and moving on to new markets beyond.”

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes