At this year's Guernsey Private Wealth Forum 2025, the second panel session titled 'Preserving Wealth' starred Gillian Browning from GFSC, Edward Emblem from S&W, Kerrie Le Tissier from HIGHVERN, & Helen McGhee from Joseph Hage Aaronson & Bremen.
The panel discussed topics such as well-established expertise and service provision in Guernsey and the range of products and structures available, including PTCs, Family PIFs, and Foundations.
Transcript
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just slightly ahead of time, but um I'm very conscious that uh this is a bit
kind of like the warm-up act for the thing that you've all really come for, which is celebrities having a fireside
informal unscripted chat. Um so, uh if I can just invite my uh panelists up for
the second, uh panel of the day. Um this session is on the subject of preserving
wealth. Um clearly Gernzi has a long history of assisting uh clients to
facilitation facilitate the riskmanagement aspects associated with
preserving wealth. Uh and in that sense I have with me uh Jillian Browning uh
co-director co- deputy director general uh at the GFSC. Um her expertise is clearly in the
role that regulation plays in managing those risks. uh Edward Emblem, a partner
at SNW, uh who is an expert in the tax risks associated with that wealth
preservation. Uh Kerry Latier, the country head for Gernzi at Hyvern, uh
who is the expert in relation to the fiduciary risks of those that have structures uh which is clearly one of
the specialties of Gernzi in particular. uh and Helen McGee, partner at Joseph
Hey, Aronson and Braymond LLP, uh who is our expert for the afternoon in relation to the legal risks which range from
divorce through all sorts of contentious uh disputes that are associated with
owning wealth and between family members who hold wealth collectively within these sorts of structures.
The topics that we'll try to cover in the next half an hour include the preservation of wealth beyond the
initial earning phase from traditional investments and structuring including in so-called passion assets such as art and
automobiles. Uh inter and intragenerational succession planning ensuring wealth is
both protected for the future of the individual and their successes. the characteristics of Gernzi as a
well-established jurisdiction with the expertise and range expertise and range of service offerings to support this
group of clients and consideration of the range of products and structures available including private trust
companies, family piffs, foundations uh and in particular uh I know that Jillian
will focus on the Gernzi family piff and its recent uh developments. uh and as I said we'll talk about some
of the topical subjects passion asset investment sustainable finance uh reputation and image right image rights
which we were touching on in the first session as well. So uh one thing I
should have pointed out is that the full bios of the panelists all of the panelists today are all in the micro
site for future reference. I've just done a very quick caner through in the interest of time.
Uh if I just start with you Edward um you've got direct in experience of
working with influencers as clients as well as the old money type clients that
a lot of us would be more familiar with landed estates etc. Um how do these new
industry clients evolve as their careers progress and how different is working with them later in their career careers
compared with when they started? Thank you. Can you hear me? Okay. Yeah. No, great question. Um, I think if the
question is, do young wealth creators ever slow down and settle down? I think no, that doesn't happen. They're just
like any group of entrepreneurs, they keep going. Um, and so the social media
influencers that we work with, they might have tapped into the idea of using their personality as an asset, but
that's just a manifestation, I think, of a drive to create, to see an idea through. um and
they might be doing YouTube videos one day, but then they move on very quickly to um whether it's reality TV or whether
it's uh launching a book or launching a podcast or a health business or a fitness business. And I think that it's
the job of the adviser to to keep up in those early years. Um, and make sure
that if you're, you know, in between phone calls two weeks apart that you're not in a situation where the client's
going to put a load of things together in that space of time that you then have to either work with knowing that they're not quite right or have the awkward
conversation with the client. Um, and so I suppose it's the evolution is then in
that maturity of mindset of approaching the adviser, making sure that they're comfortable with uh the advice that you
give. Um so that if you do have to uh break sort of slightly awkward news to them. So for example, you know, all of
those uh gifts and hospitality that you've been getting in exchange for your services that you think are freebies and
actually in some cases they might be subject to tax. Um that they're not going to ignore you or take some advice
that they think suits them better. Um, and even incidentally, if they if they do like it, I had a situation where my
tax advice was the subject of a YouTube uh video uh because the influencer had
had got it but wanted to share that message. Um, don't look it up. Um, but
um but whilst whilst they themselves was quite happy with it, the comments some of them had a slightly different view.
So yeah, at least I didn't get cancelled. Um but uh but yeah, going back to the point, I think it's that as
they evolve in their journey, taking on board that advice, especially if they're someone who has been used to working a
lot of things out for themselves, uh and making sure that you're the sounding board for that advice. Brilliant. Kerry where Edward has given
the sage advice and it's been taken on board by clients like this the challenge for a fiduciary in trying to get point
across about preserving wealth for them and their successes. How do you find that?
Well, I always start from the the same position of making sure we get really get to know the client and not assuming
that all clients are well creative or all entrepreneurs the same because obviously they're not. um the session
before touched on this and looking at their their objectives and each individual's objectives and what they're
trying to um what they're trying to preserve for starters. So what what their assets are, what what the wealth
creation process has been um and whether or not it's
the wealth creation is is through inter in intellectual property rights or if
there is a business that's already in a company um and how complex that already is because when when the client comes to
a fiduciary they're already fairly far far into that journey. So, we're getting
to know the individual, what their objectives are, what their their focus is, and when they're looking at planning
for the future, exactly what that is. So, who they're who they're preserving the wealth for. If if we're talking
younger wealth creators and entrepreneurs, they might not really be thinking about family or children yet,
which is quite different to the typical clients we've historically dealt with um
in Gernzi. They tend to be sort of entrepreneurial families um
multigenerational families and we are thinking about children but younger wealth creators might not got that far
yet. They might be looking at business continuity um and ensuring business isn't broken up
and held within one of consolidated entity or structure. Um, asset
protection might mean something different to an entrepreneur or a younger wealth creator in a different
industry. So, asset protection, obviously, we're talking about protecting the wealth from external
threats, but what are those external threats that they're dealing with? if their if their business is through
making a product say that the threats there may be real threats of litigation
um threats to reputation um the threats might not be sort of what we've
typically looked at when we're dealing with crossber family say they might be
quite um specific. So we get to know those objectives, get to know the
clients before we even think about a structure. And then we can start talking about well is a is a corporate entity
appropriate or a trust? Um and and trusts have been our bread and butter in Gernzi for a long time and we've got a
lot of experience with trusts, but more and more we're dealing with other types of structures. So companies, protected
cell companies, we come across those sometimes in private wealth structures. Um and now the family private investment
fund is another solution. So we've got all these different um structures we can
look at but we shouldn't we don't get to that until we've understood exactly what the objectives are
and build that relationship of trust and confidence because obviously when we are talking about innovative products like
the family investment uh vehicle um Jillian do you want to just talk to us a
little bit about that because obviously clearly when things are new and different everybody kind of needs to get their head around it and make sure that
they understand it well enough to be able to talk to potential clients about how to use it. Yeah, thank you. So, just building a
little bit on what Kerry was already saying, just taking a step back and Gernzine is one of the first jurisdictions in the world to um ever
regulate fiduciaries and currently we have 125 private trust companies in the
jurisdiction and 144 full fiduciary licenses and they manage many many
hundreds of billions of assets in um liquid assets. Um it might be company
shares, it might be real estate, it might be passion assets and um you investors come from around the world but
particularly US, UK, EU and the Middle East. Um and what we've observed as a
regulator is a a maturing of the fiduciary market in Gernzi. We've had almost 30 years in this space and um as
part of that maturing we've seen a move um towards an interest in more
investment type vehicles. So today what we've been um announcing is is the
opening up of the family piff to fiduciaries to make it easier for family pips to be offered. So I think these are
a complimentary product alongside trust. they still very much are the bread and butter of the jurisdiction.
I guess what we see is that they can be perhaps in some cases more tailored um
to the circumstances of the ultra high net worth individual. They have the benefits of a collective investment
scheme. They're regulated by us, but they're regulated their regulatory approval can be achieved through as
little as 24 hours through our online portal. Um and what we try to do as a
regulator is calibrate the regulatory framework to the investors um's needs
and requirements. And this is one way of doing it. Um terms of what we say we're
opening up making it easier. We're reducing some of the regulatory fees associated and modifying some of the um
regulatory requirements um because we're very conscious of the I guess the target market for the family p.
Thank you Jenny. Helen, in terms of uh this question of trust and confidence that's required to get to know and
understand this part, I know you were saying earlier that you've started with some clients who were in contentious
situations and having migrated through that contentiousness continue to work with you because they have that level of
trust and confidence. How important do you see that that combination that relationship being in terms of
preserving wealth? Super important I think and I guess um
what you know you're getting at is is gonna what we've had we've seen this morning there's some recurring themes
throughout what everyone on this stage is saying. We're talking a lot about
education and Alice and Tom talked this morning about education from financial perspective. I think what we're sort of
now talking about is education from the legal fiduciary perspective and we've
talked a lot about relationship building and we've talked a lot about comms and all of that is sort of gets rolled into
one and just pausing for a second there on education from a legal perspective
and education the next generation of wealth the onus is on the advisers to educate because
they're the ones who know the invest they know the structures inside out. So,
they've got to find and take the opportunities to educate, you know,
explain uh, you know, I said like uh Allison Tom talked about the financial
side, but in terms of the legal side, not everyone knows what a discretionary trust is. You know, especially some of
these some of the people coming into this wealth structure, what is a discretionary trust entitlement? What
does that look like? you know, you're entitled to ask for a distribution, but to be clear, that money is not yours.
You know, and understanding what a what's a protector there for, you know, that the protectors there basically to
uphold and guard the settler's intentions uh and to look at the management of the trust. You know, these
kind of concepts that we and a lot of, you know, of us in this room live and breathe and see where things go wrong.
If you get in the at the beginning and we'll touch upon this as we just talk about this more, you know, it's about
sort of making sure everyone understands that there's that transparency around who's doing what and what are the rules
around this? You know, is there an open uh distribution policy? Has have people
been talked talked through what the distribution policy looks like? What is it? What are the investors? And I think
again the the the panel earlier were talking about this increased uh curiosity
um that's coming from the younger generations. They want to understand what an investment policy is so that
they can understand how this wealth is going to grow grow and therefore how
they kind of guard it. Um and the advisers are there to keep track of this
kind of evolving um policy within the family
philanthropic needs, desires um and to nurturing and nurturing that
relationship with the adviserss means that that's how you help grow it. And it
is really is all about understanding the importance of good relationships with
with the advisors, understanding the enormity of the power of some of the guardians and some of that is people
that have been put in place via a trust corp or whatever. But you know it's uh
it's about respecting what these people are there for. And you I can see some
people in this room have battled some they've been through some of these battles with me that you know many a
time we come across where a trustee takes uh where sorry a beneficiary takes
a trustee to court because they disagree with the distribution policy that's being followed. Very few judges will
want to upset that relationship. you know, especially if because they the
reason why this case is coming before them is because somebody didn't take somebody through and nobody understood
from the beginning. There's very little judicial sympathy there, they will uphold a decision of a trustee.
Yeah, I think I think you make an excellent point in emphasizing the importance of transparency. I think it's, you know, in recognizing the
history of this industry generally, I think it's fair to say that opacity was a characteristic uh 10, 20, 30 years
ago. Uh, and that what we need to recognize is that time has moved on. Uh,
and that isn't just in terms of the new structures, that is in terms of the old structures as well. And that actually
the need to use the strength of those relationships to help people to move to
contemporary standards. not something that I think everybody is kind of as cognizant of as perhaps they could be.
Uh it I think we're you know the tide has gone out on some of our structures generally. I think Gernie perhaps as a
jurisdiction isn't necessarily a huge problem for us but I think there are issues in the industry generally around
all of that. Edwarding on then to the passion assets characteristic. Um
there's obviously an appeal for younger wealth owners to own
uh watches although perhaps not in London um uh and uh automobiles sorts of
things that can be presented on social media. Um, how do you kind of as an
adviser make sure that this lifestyle inflation doesn't jeopardize the
long-term prosperity of them and their successes and it's kept in balance.
Sure. Yeah. Well, I think there's a bit of a myth that young wealth creators are
all into passion assets. I think some of them now, especially over the last couple of years, feel that it's maybe a
bit ostentatious or flat tacky to be flashing your wealth. But certainly that
conspicuous consumption which leads to that uh lifestyle um uh that uh sorry
lifestyle what do you say lifestyle the the um
uh inflation lifestyle inflation. Yeah. So so that lifestyle inflation that sort of
risks uh not overtaking their actual earning capacity. um whether that's
lottery winners or anyone who comes into wealth, there's always a risk there. Um
and in fact, I had a client who was uh 23 years old, had come into 75 million
pounds very suddenly and bought a helicopter on impulse, admitted that she'd done it just to impress her
sister. Um, and I think and so, you know, it's it's being able
to have those conversations where you say while you're thinking in your mind, fantastic, you've bought this um,
ridiculously expensive fast depreciating, highly liquid asset. That's great, but let's help work out
the logistics and the practicalities and make it work for you. And I suppose again coming back to that point of being
that sounding board. Um which means that when they come to you with those sorts
of questions, you can then start having the bigger conversations about for example, you know, that's great, but how
about that philanthropic venture that we talked about or how about a plan for the kids when they come along? Um and so
again, being front of mind, making sure the client's coming to you uh and that you're able to give them a steer in the
right direction. Absolutely. Kerry, um when wealth opens
up and these doors are are opened to investing into their passions, uh what
are the considerations that advisers need to discuss with them and how can they structured in such a way that they
protect and preserve to the greatest degree possible? So I think the important thing is to start
with the purpose and motivation behind buying an asset like that. Is it that they genuinely enjoy cars or
helicopters, um, planes, boats, luxury property, so on? Is it a genuine personal enjoyment?
Do they intend to use it? Have they bought it as a status symbol to impress
their sister or others? Or is it an actual wellthought through investment
strategy? Have they have they done the research? Are they actually thinking about about it from a kind of
diversification perspective? Is it a long-term investment? So, that's where the conversation would start. Then, I'd
be looking at whether or not it is a one-off investment or if it's the beginning of a collection, say, of cars
or artwork, because that would help shape what a structure around it might look like. Then there's some initial
legal and tax considerations or bits of information that we'd need to know so that we can work out the legal and tax
side and take appropriate tax and legal advice. um things like where the assets are
actually located, who would be using them, how where they're being used, where they're being used, how the how
they're owned, if they're if they're an asset that is registered on a registry, so like an aircraft um property or or or
if it's sort of more complex than that. Um and and all the while we'd be sort of
ma making sure we're we're tearing up advisers because all these assets have
all got their own kind of characteristics um you know complex complex issues that will need resolving
and that's before we get on to look at looking at a structure. But then once we've got all that information and the
advice on how they're owned, tax considerations, then we can look at different
structures. And again, um, Gern's got a full range of structures that we could
use. One of the most common structure for owning these types of assets is
simply a company, a special purpose vehicle, either as a standalone entity that will just hold the asset and and if
it's intended to be one investment, a oneoff like a car or a plane, that might
be a straightforward um way to hold it. And having an asset like that in a
company can help with things like um licenses. If the if if the intention is
the property, the the asset will be used by others like a yacht. Um quite often
we'll find that whilst the yacht is a has been bought because
the client's going to have personal enjoyment, they're probably not going to use it all the time or that regularly.
So sometimes they do look at chartering out and using a company is kind of quite a straightforward um straightforward way
of doing that. But then we need to look at the ownership above the company and that's where things like structures like
trusts are really useful for for the for the ownership and
succession planning. But then there's other structures as well foundations which I didn't mention before. Gernzi's
Gernzi has foundations which are more familiar which are very familiar in civil law jurisdictions but we've got
our own foundation and they're often used as asset holding
vehicles. You have an you have a set up a foundation for a particular purpose and that could be holding specific
assets for specific reasons. So they could be really well suited to passion
assets trusts as well. And a specific type of trust that we see a lot of is a
non-charitable purpose trust. Um and they're particularly useful for hold holding assets as well that um might may
be held for a particular reason. So to to hold property for a particular use,
to hold a collection of artwork, to be displayed um in a particular
gallery and so on. Um, so yeah, again there's lot lots of structuring options,
but it's getting getting the the advice right at the front and tax is usually a
big consideration um particularly around these types of assets because
that they could be located in so many different jurisdictions held in different ways um and it is quite
complex. So as a trustee my first protocol would be what do the advisor
say? What do the tax and legal advisor say before we set up a structure around this? That's that's excellent. And and I guess
you know the complexity of this area does mean that where it all goes
horribly wrong the costs can be very significant whether they're through divorce or commercial disputes or other
other forms of contentiousness. Um Helen how import Do you think the issue of
education is in relation to those early initial earning phases where people as
we said in the earlier panel, you know, they are very kind of special purpose
vehicles in their own right, they're very focused on making money and doing the thing that they know really well. Do
you think as a community of advisers we get involved early enough in having these sorts of conversations? Well, it's
a good question and I think coming at it from you know the because I'm a disputes lawyer like we see it all at the back
end and it's all gone wrong and it and what when we're looking at where it's all gone wrong the wish is always oh god
I wish we'd have got in earlier so that this hasn't gone so horribly wrong and so that you don't see this huge
dissipation of assets because it's being spent on legal fees or whatever else
because it the the dispute needs managing and stuff. So my uh on top of
the have the right people in place, have every make sure you know what I was saying earlier, make sure everyone understands what's what is actually my
main piece of advice is is is make hay while the sun shines. So while everything's good, make sure everything
is in place for when it all goes bad. And that's relatively easy to do from an
advisor's perspective. It's very difficult to do from the individual's perspective because most of the time the
things that drive disputes are life events are divorce and death. And you
know, nobody knows when those two things are going to happen. But we as advisors are very battlewary. We can anticipate
all these things. Get a good prenup in place. get a well-drafted trust deed in
place. You know, you the trusted uh there's no reason why trustdeed
disputes clause can't be much more akin to a commercial contract clause that you
know that sets out very clearly what happens in the event of a dispute. Um it
it's it can be a tiered or a staged process in terms of dispute resolution, mediation, timelike constraints, when
decisions have to be made by in the event of a dispute where choice of jurisdiction. You know, we're here uh in
this lovely venue today talking about Gernzi because Gernzi is a very popular
choice of jurisdiction. You know, in Gernzi, we have a there's a strong bench, uh, supportive judiciary,
reliable, enforcable judgments, speedy judgments, all that kind of thing can be
folded into any agreement. And therefore, in the event that something
goes wrong, people understand the process as to how
a dispute can be resolved. And so, you know, again, I'm like I can see people
who again have lived and breathed some of these same disputes with me that that where you see things go so horribly
wrong is where the individuals maybe attempt to resolve it themselves and yet
two years down the line absolutely no progress has been made. They've pulled in lawyers ad hoc. they've done random
things, but know when to ask for help and know that the the threat of uh of
judicial intervention, judicial oversight can be a bit daunting, but it
will it will that you will get results from it. Jillian, on that point, obviously
clients have a huge range of choice in terms of their jurisdictions uh that are available to to work with.
Um, in terms of you as a regulator, how do you make the environment accessible
to all different types of businesses to ensure that clients have the range of choices as advisers that they would want
to work with? Yeah. So, Genery is home to all sorts of different types of diverse businesses
from the small boutique to the very large international group and we regulate them all and we do on-site
visits and collect data, everything you'd expect a regulator to do. I guess what we do in particular to focus on
that enabling environment partly is getting out you know not just being in the regulators glass box but you know
speaking to businesses but also speaking to prospective clients speaking to um introducing lawyers off island to see
what what's happening what are the um themes and trends. We also have invested quite a lot in technology ourselves to
make us as efficient as possible. So we have our authorizations and application portal where if you wish you can track
your application like a DHL parcel. So it doesn't just go into a regulatory gray box and you wonder what on earth
has happened but you can see what's been um progressing. Brilliant. Thank you very much. Um I'm
conscious that we're pretty much on time. So, if we can do the same as I did with the previous panel, just ask each
of you for a couple of final thoughts uh to uh to wrap up the session ahead of
our fireside chat. Uh who'd like to go first? Um well, just something on on the
flexibility of structuring. I think that um there's often a case and we've seen this in the previous session that on the
one end of the scale, you've got maybe the solution which is most flexible but isn't particularly tax efficient. On the
other end of the scale, you've got something which might be really tax efficient but doesn't actually offer all that max most that much flexibility. And
often it's a case in conversations with clients of finding the right place on the scale. And also we we heard about
the psycholog psychology of investing. I think the same is true of of structuring and tax advice that they say that it's
the path of least regret a lot of the time that people regret things that they uh haven't done more than the things
they have done. So sometimes testing with a client how a scenario might look from a certain future perspective can
help them work out whether they're in the right place in the decision- making process at the time. Very sage advice.
I would say um big takeaway here is that it's not a case of one sizefits-all when
we're looking at structuring for private clients who have have accumulated
private wealth. that historically like I said before we we we have a lot of trusts in go we've set up them um for
years and the discretion we trust um is very familiar to all of us but more and
more we're seeing different types of structures and recognizing that the our clients are changing the they're more
and more diverse they're the wealth is coming from different places and in different ways so we we need to evolve
and be ready to use our structures differently and to to use the full range of structures available to us. Um, and
just always keep that in mind that yeah, one size doesn't always fit all. Definitely.
Yeah, just building on that, my takeway is probably similar to Kerry's in that there's a range of different um
structuring options in Gernzi. I think everything we've talked about today you can do. Um if there's anything
particularly innovative and you're thinking oh this this might be a new way of achieving even better outcome for
your clients and come and do talk to either um lawyers or advisers on the
island or us as a regulator. We're very happy to like sandbox and just try things out with sort of regulatory
support if something's particularly innovative. So yeah guess it's that we're open for business and you can do it all.
Helen, final thoughts? Um, should I finish on a Ted Lasso quote? Be
curious, not judgmental. Like, come at this. They have no preconceived ideas and everyone come at it with an open
mind and education, relationships, communication.
Brilliant. Thank you very much indeed to all of you. If I could ask you all to join me in thanking our panelists.
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