Economic substance versus family office structures in the Channel Islands Economic substance legislation came into effect across the Channel Islands in January 2019, meaning companies must now demonstrate they meet these rules if relevant.
A family office is bespoke to a family’s needs and can take many forms to look after the family’s wealth, often incorporating trust and company structures within.
The purpose is to manage, preserve and grow the family’s wealth for both current and future generations, ensuring the legacy of the family that set up the office, and also providing for the family’s day-to-day running costs.
Typically, this will involve managing the family’s investments, moveable assets (such as art work, vehicles and antiques), commercial and residential properties, as well as administering privately-owned businesses.
It can also include day-to-day accounting and coordinating with the relevant professionals to undertake payroll, tax services, legal affairs, investment management and succession planning.
Concierge services are often also provided, which could include managing household staff, settling education fees, making travel arrangements, and even personal shopping services.
Family office and concierge services are as unique as the family they support. Their primary goal is to give the luxury of time by removing the hassle of organising day-to-day life.
Family offices can be structured in one of three ways:
There are many benefits to using the hybrid structure, particularly when it comes to its set up and management.
Setting up a single-family office requires a huge investment and level of trust in whomever the family appoints to manage the responsibility, given it is on an ongoing basis.
This appointment would also need monitoring and remunerating to ensure its longevity with the family, whereas the hybrid approach, using a regulated service provider in the Channel Islands, removes both the recruitment and selection process of individuals, as well as the remuneration, as they would be appointed by the service provider directly.
Likewise, it is the regulated service provider’s responsibility to ensure the business is adequately resourced (on an ongoing basis) and can manage the workload of its clients, including its hybrid family office arrangements.
This provides for a longevity of relationship and peace of mind to families, not least as there is a succession plan in place.
Another clear benefit of using a regulated service provider is the procedures and controls it has in place to mitigate risks when managing assets on behalf of others.
With single-family office arrangements, the personnel are not operating in a regulated environment and the focus is much more on delivering what the family wants. The hybrid option also looks to achieve the family’s goals, but within a robust risk management environment, which provides both independent oversight and effective risk management for families.
Please sign up to receive regular updates to help you understand the options available to high net worth individuals and their families to manage their wealth.
Nedgroup Trust is able to offer hybrid family office and concierge services tailored to the UHNWI’s family needs by outsourcing certain functions to third-party tax, legal and investment experts, while providing a single primary point of contact to coordinate all aspects of the family’s affairs. A dedicated administrator will be responsible for the day-to-day administration of the family’s affairs, with the supervision and support of a manager and director to ensure the relevant expertise is always available.
Should you require any further information, please contact your usual Nedgroup Trust relationship manager who will be happy to discuss how we can help. Or get in touch using the links to the forms towards the end of the page.
15 Dec
| 4 mins
The response to COVID-19 showed that many people can act swiftly and spontaneously to support a vital cause. In less frantic times, however, it might pay to take a more considered and structured approach to giving as John Williams explains.
9 Nov
| 60 mins
Nedbank Private Wealth South Africa hosted a webinar as to how local charitable trusts and foundations can balance meeting immediate needs and commitments to beneficiaries with long-term sustainability against the backdrop of COVID-19.
If you are interested in becoming a client, please complete the form via the ‘become a client’ button below. Alternatively, if you are already a client, or if you have a question about how we help clients in particular circumstances, please use the ‘contact us’ button.
We will get back to you as soon as we can during office hours, which are Monday to Friday, 8am to 8pm (UK time), except for UK public holidays.
Copyright Nedbank Limited 2022.
Thank you for your interest in Nedbank Private Wealth. Please call us on +44 (0)1624 645000 or complete the requested information and one of our team will get back to you soon. We look forward to speaking with you. Please note: If you are an EU resident, we are unfortunately unable to offer our services to you at present.
* Required fields
This is the Nedbank Private Wealth International website. You can access Nedbank Private Wealth South Africa by clicking on the link or using the toggle in the header.
This website is accessible worldwide. We cannot guarantee that the website or the information contained within it complies with, or is appropriate for use in, all jurisdictions. The purpose of this website is to provide information about Nedbank Private Wealth, our products and services, and how we aim to help our clients. Not all products and services referred to in this website are available in all jurisdictions. The information contained in the website is not intended to, and does not constitute, any offer by us to sell, nor it is intended to be an invitation or solicitation to buy, any product or service, and must not be relied on in connection with any investment or other decision. More information is available in the legal notices section of this website. This message will only be displayed once.
This website uses cookies to improve your experience on our website. We recently updated our privacy policy and our cookies policy to ensure you understand how we protect your personal information. Please note that in order to stop cookies being downloaded, you will need to change your browser settings, which we explain in our cookies policy.