This publication spoke recently to a range of wealth management and associated practitioners in the island, a jurisdiction that like its peers faces challenges to the offshore world.
WealthBriefing’s visit to the Island involved meetings with WH Ireland, the wealth management firm and stockbroker; Canaccord Genuity Wealth Management and Oak Group. This speaks of the mix of investment management and wealth structuring work going on in the IoM.
At Oak Group, for example, managing director Tanya O’Carroll points out that the firm has already expanded via amalgamation and is looking to expand further. Fairway Group, the Jersey-based fiduciary business, is in the process of merging with Oak Group, launched in March this year. O’Carroll is upbeat about the Isle of Man’s growth potential in her sector as a whole (her firm also operates in Jersey, Guernsey, Malta, Mauritius, and Luxembourg). “The staff are highly qualified, and we were [from the amalgamated firms] all owner-managed businesses,” she said.
“We know our clients and what they want…. for example, we know what their kids are going to study. We deal with families that are globally mobile,” O’Carroll continued.
“The model on the island traditionally has been old family wealth. However, our clients have tended to be entrepreneurs…. people who want value for money. A strong area has been property,” she said, discussing the economics of the Island’s client base.
“There have been changes that have impacted the island’s fiduciary businesses,” she said, referring to changes to UK capital gains tax, for example, which now encompasses commercial as well as residential property owned via offshore structures.
“We need to encourage more people to come to the Isle of Man – it is a great place to bring up a family,” O’Carroll said.
She added that at present there are about 220 staff at Oak Group, and she expected that figure “to grow substantially”.
Cybercurrency and blockchain
A term that came up a few times was “fast follower” – the idea that the island should not try always to be the first out of the gate in pushing a new technology or business model but close enough to the leaders in order to avoid being left in the slow lane. And the fast follower approach is one that the Island’s digital currency/distributed ledger technology business advocates say is important.
WealthBriefing spoke to Steve Billinghurst, regulatory head at Blockchain Isle Of Man, a government-backed body that recently shifted operations to a new centre in Victoria Street, Douglas. Like several of the professionals in the space, Billinghurst wears several hats: he is advisory director at PricewaterhouseCoopers, working across a variety of industry sectors in the past.
More than three years ago, legislation came into force in the IoM requiring all cryptocurrency businesses based there to formally register with its government to be inspected by the financial watchdog. The move was part of a series of steps by the Isle of Man to put businesses, such as those associated with the controversial Bitcoin digital currency, under some kind of formal insight. The attitude seems to be that rather than ban these technologies, it is better to create a structure where they can operate in a controlled environment. And it is a move that pits the Isle of Man against rival IFCs such as Malta, Jersey and Switzerland, to name just three.
At the time (late July) when this publication visited the Isle of Man, the Hubb, an incubator for blockchain and technology companies that work alongside Blockchain Isle of Man, had already incubated one cryptobusiness which grew significantly.
Billinghurst said there is a clear benefit to the Island in having such an incubation centre for this technology running alongside its existing status as a wealth management centre. For example, the technology can help drive areas such as KYC checks, he said. Blockchain distributed ledger technology is also useful in dealing with the kind of beneficial ownership information requirements that have arisen, he continued.
“What we are doing here is providing a safe space for businesses to develop their products,” he said, adding that part of his role is to give practitioners a “sense of realism” about what these technologies can, and sometimes cannot, do.
His colleague at Blockchain Isle of Man, Christine Hellman – strategic lead, said Blockchain Isle of Man helps people to try out new ideas in a supportive environment. “We know the regulators and we are in open dialogue with them; we strike a good balance and that’s been a differentiator for us,” she said.
The IoM knows it has further to go in achieving more business diversity, and like the rest of us, will be anxious that the neighbours in the UK get Brexit sorted out, one way or the other. What does appear clear, however, is that in an age of heightened uncertainty, its virtues are likely to attract more attention than perhaps they have in the past.