01 October 2014 Issue 8 Rosemary Marr

From the Editor - Rosemary Marr introduces STEP Journal October 2014 issue

Recently, a hoard of at least 70,000 coins, as well as jewellery, saw the light of day for the first time in 2,000 years, having been buried in a field in Jersey.

In the modern era, families are still seeking safe havens for their wealth, albeit rarely with enemy soldiers at their heels.

Anxious to preserve their wealth, those who live in politically unstable areas of the world often decide to place their assets in Jersey. In an echo of times past, these assets are not in the form of stocks and shares, but illiquid investments – i.e. precious metals, such as gold and silver. Not motivated by any desire for tax mitigation, the owners’ prime concern is to ensure their wealth is in a safe place for the benefit of their families and successive generations. Today, those assets, according to valuations, are worth many millions of pounds.

With over 2,300 STEP members operating within a robust regulatory framework, the British Crown Dependencies of Guernsey, Jersey and the Isle of Man are well placed to manage the wealth of clients in a stable and secure environment. In an interview, Alasdair McLaren, a Guernsey-based member of STEP’s Council, considers changes in international trusts over the years and takes the opportunity to encourage readers to become more involved with the Society. The evolution of trusts continues and it is evident that jurisdictions operating in these competitive markets must continue to evolve and keep pace with changes to legislation, taxation and the increasingly complex requirements of families.

Other contributions from Crown Dependency practitioners include an article by Samantha McFadzean and John Rimmer on the treatment of prenups in Jersey, Guernsey and the Isle of Man ; Henry Wickham’s survey of some important legislative developments in Jersey; and Tim Cartwright’s snapshot of regulatory and economic developments in Jersey. The impact of tax information exchange agreements on Isle of Man trustees is considered by Annemarie Hughes and Donna Matthews. It is a topic that is becoming more familiar to many readers, although not all will have considered the problems arising from such agreements.This issue of the STEP Journal has a mini-regional focus on the Mediterranean finance centres of Gibraltar and Malta, as well as Russia, the latter country putting in a guest appearance in Richard Frimston’s EU column, along with Iran and Turkey. Several features cover investment-related matters. Kevin Custis considers investment policy statements and benchmarks, while Nick Barran considers the importance of diversifying assets, Mark Despres and Paul Garrard ponder the merits or otherwise of fixed-income investing in challenging times, and Charlotte Thorne notes that ultra-high-net-worth individuals are struggling to access private equity. If there is one case that remains locked in our collective memories, it is the 35-year-old Bartlett case and the risks associated with company shares. Former Channel Islands resident John Harper looks at the issues involved in his regular international student column. Meanwhile, Mason Birbeck, yet another contributor from the Crown Dependencies, examines how trustees can mitigate risk in relation to investment of trust assets. Finally, I recommend two pieces of editorial relating to family business advising in Asia: an interview with Zac Lucas and Ken McCracken; and an article by Patricia Woo, entitled ‘A better family office’.

Although today’s equivalent of hiding family assets in muddy fields may be more sophisticated, the motivation remains the same, with asset protection and succession planning remaining key considerations for the wealthy. In our complex modern society, however, there are issues beyond day-to-day matters, such as governance, that professionals working with families in this sector must address. To this end, STEP’s Advanced Certificates in Working with Family Offices and Family Business Advising have been well received. The latter course is now covered in Singapore and Hong Kong, while the former has also been run in Singapore, and we are planning to extend it to elsewhere in the STEP world.