INTERVIEW: IoM's Pained Fund Sector Needs Rehabilitating, Say Government, Wealth Managers

Josh O'Neill

28 June 2017

Government officials and investment managers based on the Isle of Man have warned that if its troubled funds industry is not resurrected, then further assets could be lost to money managers operating in rival UK Crown Dependencies.

In 2008, prior to the financial tsunami, funds under management on the Isle of Man hovered around $58 billion. Since then, that figure has plummeted to just $17.68 billion, according to the latest data from the Isle's financial regulator.

And this has set alarm bells ringing for both the Manx government and businesses working in the sector.

“The funds industry in the Isle of Man is hugely challenging,” said David Long, chief investment officer of wants to spur the sector, but, in truth, I don't know how we could get around the VAT issue,” Preskey said. “One thing being talked about is a carve-out for VAT, but how that would look in reality and how it would be viewed elsewhere I don't really know.”

He added: “Sometimes there is simply a limit to how much we can do.”

But Capital International's Long has argued that a lack of effort from the Isle's financial regulator to stimulate the sector could be stymieing its revival.

“I don't think there is the regulatory or political appetite to drive the funds industry on the Isle of Man – they're seen as too high risk,” Long said.

Brexit is another issue the Isle of Man is grappling with.

As reported by this news service earlier this month, the Isle of Man's Chief Minister Howard Quayle has been liaising with figureheads from the UK government since he took up his post last October to ensure the crown dependency “has a voice” in Brexit negotiations.

Although the Isle of Man is not part of the European Union, the UK's divorce from the bloc will inevitably throw up questions marks, as the island's current entitlement to freely move goods within the EU cannot be guaranteed after Brexit.

And this may not bode well for the funds sector, according to Long.

“I have my doubts as to whether Brexit will spur the funds industry,” he said. “But I think it is imperative that the Isle's regulatory regime is equivalent and should have equivalent status with the rest of the EU.”