New world order

Alasdair McLaren TEP has over 20 years’ experience in the international trust industry, having begun his career in Guernsey with KPMG. At that point, Alasdair’s role was split according to the seasons – in the winter, he worked as an auditor and, in the summer, when the firm would quieten down, he was seconded to the trust company. It soon became apparent that dealing with families and individuals was the direction he wanted to take, so he turned away from the auditing side.

After a spell in the British Virgin Islands between 1996 and 1998, Alasdair returned to Guernsey and since then has worked in the fiduciary sector. ‘At first, I looked after the clients themselves, before looking after the people who look after the clients, and finally looking after the companies which employ the people who look after clients,’ he comments. ‘The common thread through all this is that I am dealing with families and dealing with individuals, and that’s the part I find extremely interesting.’

Changes in family needs

Historically, families have always needed to deal with the issues of providing for the next generation and protecting their wealth. Those issues are no different today, Alasdair says, but the solutions are. ‘Compared to 20 years ago, families have become far more complex, and solutions have had to evolve to keep up with the changing familial landscape,’ he says.

With the advent of new regulations, the Channel Islands have procedures in place that can be updated with relative ease. It will be more of a struggle for jurisdictions without this degree of sophistication

One element that adds to this complexity is the increasingly multi-jurisdictional nature of clients: ‘Previously, most of my clients would have been UK residents. Latin American and eastern European clients would have been very unusual, whereas now the client base is truly global, with international families residing all over.’

Regulatory challenges

To keep up with this evolution in family dynamics, regulation has changed drastically. A client who is resident in one country, with a wife from another and children studying in yet another, needs an estate-planning structure that can take into account all of those cross-border issues. In recent times, the move towards automatic exchange of information, in particular through the OECD Common Reporting Standard, the US Foreign Account Tax Compliance Act (FATCA) and the multitude of FATCA intergovernmental agreements (IGAs), has meant fiduciaries need to provide more sophisticated, transparent reporting on the income and capital distributions from the structures they manage. ‘That in itself is not necessarily an added layer of complexity, but it is an extra layer of work,’ says Alasdair.

Another development is the call for a public register of beneficial ownership of trusts. The response to this has been mixed. Alasdair thinks that no trustee would want to have a public register of trust beneficiaries. He feels a register of just trust names, with the name of the trustee, would be less of a problem. ‘Guernsey’s view is that it wants a level playing field, with people understanding why they need this information, and carefully considering what information they actually do need. Some beneficiaries may be vulnerable, others completely unaware of the trust, and others still may be involved in one where the adding or removal of beneficiaries is possible. The practicalities of a register become almost unworkable,’ he explains.

Alasdair adds that, in jurisdictions such as Guernsey, the present system works very well, with trustees having to identify the beneficiaries and verify those who are likely to benefit, that information being available to the authorities should they need it.

He suggests the drive for public registries is more political than practical, as it may be perceived as helping to increase tax take by stifling tax evasion. But, Alasdair suggests: ‘One thing to bear in mind is that jurisdictions such as Guernsey or Jersey have had to report any suspicion of tax evasion for years, and there already is a regime in place. Any quality international finance centre will have regulations in place to ensure that practitioners will have that information on file, and that information can be made available to the authorities if required. There is a risk of complicating matters and registers might even be argued as being counterproductive, as legitimate businesses feel chased towards those less-regulated jurisdictions.’ It’s not a case of trying to hide anything, Alasdair explains; he just can’t see any benefit in disclosing on a public register who the named trust beneficiaries are.

All of the initiatives, whether it’s the Common Reporting Standard, FATCA or any additional reporting requirement, always come with a cost. But it is not all bad. Alasdair feels that some jurisdictions, including the Channel Islands, will have a distinct advantage in this new era of regulation and compliance: ‘With jurisdictions that have been regulated for years, the infrastructure within practitioners’ firms is already refined. In this respect, with the advent of new regulations, the Channel Islands and individual firms have procedures in place that can be updated with relative ease. It will be more of a struggle for those jurisdictions without this degree of sophistication. Advisors and clients will recognise that, to meet these requirements, they will have to be managed by firms in jurisdictions that are able to cope with these new global challenges.’

Starting out with STEP

Alasdair was working in the BVI when he heard about STEP. His boss at the time, Keith Corbin TEP, was one of the early advocates of STEP qualifications and encouraged all the trust professionals in the firm to join. ‘It was the first global umbrella organisation for trust practitioners; there wasn’t an organisation that linked in all of the trust practitioners and spoke their language, and that was the attraction for me to join,’ explains Alasdair. ‘Nowadays, membership is recognised as almost a prerequisite for a good trust practitioner, and that is reflected in job adverts and specs: “TEP qualified.” It has become, I would argue, the benchmark standard for trust practitioners.’

Alasdair has been heavily involved with the STEP Guernsey Branch, having joined the committee several years ago. His main interest has been in public policy: ‘In Guernsey, STEP is at the table when it comes to introducing new legislation and regulation. We contribute to those meetings and discussions. We’re actually determining where the trust industry is going, and that’s important, interesting and intellectually stimulating.’

Alasdair was elected to STEP Council in 2014, which has given him a much broader view of the Society: ‘It is a very useful way to find out what’s happening in the rest of the world and feed that back to my branch. I am the eyes and ears of the Council on what’s going on in Guernsey and, conversely, I can go back to my branch and highlight to them the global challenges and initiatives.’

STEP’s next hurdle

One of the biggest challenges for STEP in future is trying to get more young people involved in various committees. Alasdair is keen to dispel any myths: ‘Some members may think they don’t have the time or it may be a bit dull, but just go for it – you won’t regret it. There are huge benefits, both personal and professional. You don’t have to start by joining STEP Council; you can take small steps, such as organising lectures, conferences or sitting on a working party. Think not what STEP can do for you but what you can do for STEP!’