The global economic and political sphere is “complicated”, Jersey Finance’s chief executive Geoff Cook explained to an audience of wealth management professionals in London this week.
Mr Cook said that there has been “extraordinary change in the past year” with Trump’s Presidency, the recent French Elections, the looming UK General Election, the Panama Papers scandal and Brexit all contributing to a shift in both international politics and the global economy.
President Trump is “making waves” in a USA that “remains divided” whilst the new French President Macron, having won just 20 million of 46 million available, “will find it hard”.
Populism, Mr Cook added, continues in Europe with recent polls finding 31 percent of Spaniards and 21 percent of French respondents plan to protest publicly in the next 12 months.
Mr Cook said the Panama Papers scandal had “flushed out what is in the public interest and what interests the public” and that it was dangerous how “superficial commentary can be”. People, he added, have a right to confidentiality.
Although unexpected, Mr Cook said that, unlike the UK, Jersey had a plan for Brexit and was working with the City of London and the CBI to help London remain at the apex of global finance.
“We can’t direct the wind but can adjust the sails,” he explained of Jersey’s strategy.
Within the private wealth sector Mr Cook observed that there are two trends in the world at present. Firstly, a burgeoning consumer class in the emerging markets and secondly the spending and investment power of the baby boomer generation.
Four percent more millionaires in Europe, eight percent more in the US and 8.5 percent more in Asia/Pacific annually was “good news for IFCs” with wealthy individuals looking for increasingly sophisticated investment strategies and investors looking to increase their investment allocation "across the board".
Jersey, Mr Cook went on to say, was ideally positioned to cater for this growing number of global wealthy.
The island’s reputation – critical to both firms and clients – coupled with determined and vigorous application of international standards (such as CRS, BEPs, UK Beneficial Ownership register) meant it was internationally endorsed by international bodies including EU, OECD, IMF and MoneyVAL.
Jersey believes in ‘compliant confidentiality’ and the private wealth sphere Jersey, Mr Cook said, was “maintaining momentum”
Two areas that Mr Cook said Jersey was seeing development were family offices and philanthropy. The hosting of the former something that Mr Cook said Jersey was keen to develop whilst the establishment of a charity commission was indicative of the emphasis Jersey is looking to put on the latter.
At the same time as catering to globally diverse private clients, Jersey adds value to UK and Europe and beyond, Mr Cook said. It supports 250,000 jobs in the UK and helps bring in £5 billion in tax for HMRC and is seen as an “important junior partner” in promoting the UK, whilst for Europe, Jersey supports over 90,000 jobs and brings over EUR1 billion in tax revenue.
Mr Cook said that for 2017 Jersey and its finance sector needs to be risk aware of a number of factors including how the US presidency will pan out, China’s credit situation, the EU tax package/BEPs, Brexit, EU instability, elections and migration and unexpected major event shocks.
However, the positives to look forward to in the coming year were, amongst others, changes to US tax policy, growing populism in EU which will demand jobs and growth, China transitioning (with over $2 trillion in reserves), a resurgent India and an oil price now in what Mr Cook described as in the “Goldilocks zone” at present.
Post Brexit, Mr Cook added, only one of the five largest economies in the world (Germany) will remain in the EU whilst political instability will lead business to safe harbours and Jersey was already “seeing a surge”.
Mr Cook was speaking at Jersey Finance’s annual private wealth conference on 16 May 2017. Other speakers included Richard Hay of Stikeman Elliot, Zilah Howard from Bedell Cristin and Stephenson Harwood’s James Quarmby who, during a panel discussion chaired by the BBC’s Nick Robinson, described the drive for greater disclosure of financial information as being led by “transparency jihadists”.
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