There is an emerging gap in the offshore trust market for an independent boutique company that places client relationship and high levels of service above growth for growth’s sake, according to the founders of Highvern Trustees.
Martin Hall, managing director, and Naomi Rive, group director and head of family office, told eprivateclient the business is well positioned to establish itself as a market leader in what they see as an area of the private wealth industry where consolidation of trust company providers means that many businesses are failing to meet the complex needs of international private clients and their families.
Highvern was launched in December 2016 following a management buy-out of what was Coutts & Co Trustees (Jersey) Ltd and is now wholly owned by three of its directors all of whom work within the business.
The pair says that the first six months of operations involved three key elements, firstly retaining the business’ client base following the move away from institutional ownership, secondly establishing the new Highvern brand in the market, and thirdly moving to refurbished premises and a leading IT platform.
So far the signs are very positive the firm says, with Mr Hall commenting that “the business is already ahead of where it hoped to be at this stage. This is largely due to the loyalty the clients feel towards the business, our independent ownership and the club feel that our brand and business vision offer clients.”
Mr Hall said the new name aims to “convey what we want the values of the business to be.” “Our strengths are at the high value end of the market,” he said, “where clients have complex needs and really benefit from trustees who can support them in consolidating ownership within robust structures operated from high-quality jurisdictions such as Jersey.”
There’s no doubt that Highvern had to hit the ground running. The first quarter of the year was one when trust companies were busy enough anyway – without the extra demands of creating and establishing a new identity in the market. During the period many clients were “de-enveloping” as the tax regime around UK property held in corporate entities changed, swiftly followed by updates to the beneficial ownership regime in Jersey and compliance with the Common Reporting Standard (CRS).
“It was a challenging time to deliver an MBO,” said Ms Rive. “Thankfully our staff showed great commitment and energy, allowing us to achieve everything we needed to. The move to re-furbished ‘private office’ style premises and the added bonus of new technology and systems has also helped to show both our clients and staff how much more we can offer in the new independent environment ”
She added that while de-enveloping was a challenge it also had advantages for the company as it started its new life. It meant, she explained, that staff were afforded the opportunity to showcase the services the new business could offer and the professionalism the team could bring to time sensitive and potentially stressful transactions. In a number of instances it also meant that the investment in relationships developed over many years paid off as the business was introduced to the next generation of the family to whom corporate and property interests were being transferred as part of re-structuring.
Along with the additional need to get ready for the CRS deadline and simply business as usual it meant the company had to “spin a lot of plates”. “Knowing our clients as well as we do and having high quality governance and data in place has been key to achieving all the deadlines we faced. It has also helped to focus the model and strategy of the business moving forward,” Ms Rive said.
Mr Hall and Ms Rive said that recent business development meetings including many discussions with lawyers, accountants and other intermediaries in key markets had confirmed that there is a gap in industry for specialist fiduciary businesses looking to build key relationships with high-net-worth clients and their family. These types of firms have diminished over time as changing business models have led many to focus on more corporate focused and lower risk types of business. The feedback regularly heard by Mr Hall and Ms Rive is that in many cases clients are disillusioned by their provider being focused exclusively on “revenue and not relationships.”
Whilst accepting that some clients benefit from a large firm that is able to offer a wide range of services to cater for both their personal and business affairs, Ms Rive added that that isn’t always the case. What is important is that a jurisdiction can offer choice and a good range of propositions to meet different client needs and preferences.
Recognising the need to grow in order to ensure sustainability, the pair are already considering opportunities to expand in a controlled manner perhaps by adding teams that can broaden and deepen the Highvern offering. However, they stressed it would have to fit with the ethos of the firm and be led by client demand.
The company is also ever mindful of having an international footprint but for now Mr Hall and Ms Rive believe that Jersey is the best place for Highvern being extremely well positioned to gain business from clients located around the world, and indeed is doing so. Having embraced the need to be well regulated and tax transparent ahead of many of its competitors places the island at an advantage as clients increasingly recognise the benefits of compliance and security, they said.
A recent client trend identified by Ms Rive, however, is for “simplicity of structuring combined with consolidation of structuring to one key provider in a well regulated jurisdiction.” In recent months the business has seen a number of structures transfer into Jersey with this objective in mind. This is bound to be as a result of the investment Jersey has made over many years in building its reputation internationally.
“It feels like the industry is getting back to its roots,” Mr Hall said. “Rather than being primarily about complex tax planning, structures are being established for legitimate succession, security and governance reasons. This is what the trust sector was initially established to do and now clients are seeking it out in a more robust and sophisticated way than ever before. This all means that jurisdictions and individual businesses need high quality regulations, systems and capability. We absolutely believe that Jersey and Highvern has all of these qualities.”
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