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INTERVIEW: ZEDRA Sees Strong Asia Trust Industry Potential As Hong Kong Office Opens

Tom Burroughes

12 May 2016

Asia’s trusts sector has plenty of potential, an outlook which emboldens the head of the newly-opened Hong Kong office of via a management buyout at the start of this year.

John Ashwood, a native of Australia and a former founding managing director of Vistra Hong Kong, is confident, he told WealthBriefingAsia, that ZEDRA will be able to rapidly expand in the years ahead. Ashwood’s own background is that of a trained chartered accountant. With more than 25 years of industry experience under his belt, he moved into the international trust and corporate services arena in 1998, taking on roles at trust companies in Samoa, Singapore and finally Hong Kong. Now comes the next stage of his career.

The Hong Kong office opening was announced in early April. The firm has already assembled a small team of professionals, giving them immediate operational capability, and anticipates that numbers will grow to at least 20 staff by the end of this year, according to Ashwood. The firm is also opening an office in Amsterdam, which will add to its presence in Guernsey, the Isle of Man, Jersey, Switzerland, Cayman Islands, Singapore and now Hong Kong.

“We’ve got fairly bold ambitions,” Ashwood said.

While there are plenty of corporate services providers in Hong Kong, providers of trust services are relatively “thin on the ground in comparison”. The reasons he cites include the higher level of complexity required in providing trust services, the potential higher risks, as well as a general shortage of experienced talent in this market.

One recent boost for Hong Kong as a trusts jurisdiction has been the revamp to the trust law after remaining unchanged for more than 70 years (the new law came into force at the end of 2013). A significant feature of the law was that it introduced a statutory duty of care for the first time to ensure that the trustee must exercise such care and skill as is reasonable in the circumstances having regard, in particular, to any special knowledge or experience that the trustee has or holds out as having. There are new statutory controls over trustees’ exemption of liability clauses. This essentially means that professional trustees who are remunerated for their services will no longer be exempt from liability for breach of trust arising from the trustee’s fraud, wilful misconduct or gross negligence.

“Legislation was antiquated and the introduction of a new law, which resembles Singapore’s, means that we have more of a level playing field today,” said Ashwood.

Aside from Hong Kong itself and Western clients who use Hong Kong-based trust services, Ashwood expects most private clients for the business will come from Asian countries such as Malaysia, Indonesia, Japan, Thailand, mainland China and the Philippines. 

In this professional services market, quality of service, reputation, and closeness to clients are vital areas for developing a competitive edge, Ashwood said, arguing that larger firms can reach a stage where their sheer size works against them. “When a firm’s hierarchy is relatively flat and managers are not distanced from the ground level, then that is where clients usually get excellent service.” 

The MBO and rebranding of the business as ZEDRA is part of a broader story of financial firms, such as those in the funds, trusts and corporate advisory space, reinventing themselves under new names or adopting new tags because of M&A deals. An example - which drew praise from this publication in awards for its marketing - is Elian, the old Ogier Fiduciary Services firm that held an MBO in 2014; Appleby Fiduciary Business has rebranded under the name Estera; Credit Agricole Private Banking, the Paris-headquartered group, was rebranded as Indosuez Wealth Management.

The field is a dynamic one, Ashwood said, and he enjoys the deep involvement in guiding individuals around trusts and corporate services. “What has made me stick with it is that it is interesting in terms of the diversity of clients and your involvement in assisting them.”