Much talk in the past few months has been focused on which jurisdictions are the most family office friendly. Whilst Switzerland, Monaco and London seem obvious choices when establishing a family office within Europe, we found that the Isle of Man, a self governing British Crown dependency, suited our purposes and is now making concerted and successful efforts to compete in this market.
The combination of location, political stability, legal frameworks, G20 recognised regulatory regime, and professional fiduciary service infrastructure make it an attractive option. Add to this a competitive cost basis and tax neutrality position, and the Isle of Man becomes a real alternative when looking at jurisdiction.
Over the years, the island's stunning natural beauty has attracted an increasing number of wealthy individuals and families as a place to live and base their residence. And with an individual tax cap rate of £100k, excellent quality of life, and a stable economic and political environment, it is a great location to base an entire family office or elements in part.
Our founding family operated a UK-based private family office for over 40 years and we established our presence on the Isle of Man in 2002. Whilst the family retained the investment asset management functions in the UK, all other tax, trust, accounting and fund administration functions are located in the Isle of Man.
Whilst the jurisdiction continues to try and attract ultra high net worth individuals to reside on the island, this is not a rerequisite for establishing some form of family service offering on the Isle of Man.
Accepting the fact that the majority of wealthy global families and asset managers will always cluster in London, Geneva, Zurich and the other traditional centres, we are looking to offer a platform for single family office and multi-family offices to source elements of fiduciary services requirements. As a family office, this may be an interesting choice for some. For us, it seemed the right next step in our evolution.
The multi-family office concept continues to gather pace in Europe as wealthy families' disenchantment with private banks corresponds with top investment talent disillusionment bringing together demand and supply. This new generation of multi-family offices may or may not have a founding family, but in general the focus will be on asset management and there may be a case for these asset gatherers to outsource functions of fiduciary and administration services to a provider adding value from a lower cost jurisdiction.
Working with an independent, flexible partner organisation that understands the importance of control, cost transparency and responsiveness to family needs within a service centric environment is something for the new generation of multi-family offices to consider as well as those more established single family offices looking to re-domicile from those jurisdictions that are non compliant with G20 and OECD standards.
The wealth management landscape will evolve as the fall-out from the global banking crisis continues.
The heritage and values of a family office, combined with being regulated in a 'white list' jurisdiction provides an attractive combination to those families and family offices that may wish to manage elements of their affairs in a jurisdiction with acceptance by the broader global community.