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Isle of Man Private Wealth Report 2020/21

October 2020: We are very pleased to launch the Isle of Man Private Wealth Report 2020/21.

 

A total of 41 Isle of Man based individuals participated in the independent research study, comprising of 16 private clients (HNWs, UHNWs, HVRs and wealthy entrepreneurs) and 25 private wealth professionals (trustees, investment managers, family office professionals, private bankers, insurance brokers, estate agents, lawyers, tax advisers, relocation consultants). All participants are taking part in qualitative interviews, sharing their expert views, insights and experiences in the context of Isle of Man private wealth.

Executive Summary

 

Isle of Man Real Estate. Younger wealth creators are moving to the Island and buying real estate. UHNWs prefer to build bespoke homes rather than live in existing properties available on the market. Personal safety is the major factor for wealthy families buying property on the Island.

 

Living in the Isle of Man. Abundant space to grow is a significant benefit. Tax cap is a prominent driver. New HVRs creating employment opportunities. Low unemployment but skilled workers still needed. Anonymity rather than notoriety. Diverse immigration including north of UK, South Africa, US and China. Political and economic stability - a big plus.

 

Isle of Man Private Clients. Diversity of HNWs - young, old, male, female, entrepreneurs, retirees. Entrepreneurs have an absolutely laser focus on what has to be done. No such thing as retirement for an UHNW. Drivers for UHNW wealth - money, power, lifestyle, personal safety, enjoyment, security for family and the next generation.

 

Relationships, Trust and Loyalty. Honesty and openness most important in creating trust. Trusted relationships critical in building long-term loyalty. Institutional brand reinforces trust in the private wealth professional. Culture influences the creation of trust and loyalty.

 

Investment Management. Service, quality and relationships are extremely important in selection criteria rather than price. Isle of Man investment managers compete on an institutional, rather than jurisdictional, level. Global complexity of private clients include: UHNWs, HNWs, entrepreneurs and expats. Professionals deal with gatekeepers such as lawyers or tax advisers at larger family offices. Differences in the comprehension of risk between the wealth creators and second/third generations. 

 

Life and Pensions. Life companies account for 17.5% of Island’s GDP, employing 2,000 staff. Joint promotional activities between government and Manx Insurance Association. Large diversification of sectors making up the Isle of Man GDP. Global and multi-jurisdictional clientele.

 

Trust and Corporate Services. Vast amount of services offered for private clients and corporate clients. Different structure available for asset protection, succession planning, tax planning or philanthropic causes. Choice between owner managed versus private equity owned models. Increasing specialism in aviation and yachting; and digital including cryptocurrencies, eGaming and eSport. 

 

Aviation and Yachting. World class shipping and aviation registry on the Island. Multi-jurisdictional solutions available for global clients. Flag state extremely important. Isle of Man professionals provide full yacht and aviation management services. 

 

Digital and Technology. Private clients and wealth professionals have polarised views on cryptocurrency. There remains a sceptical attitude towards investing in cryptocurrency. The Isle of Man has a world-class reputation as an e-gaming jurisdiction, which continues to grow. 

 

Succession Planning. Educating the next generation is critical in effective succession planning. Succession planning is more about estate planning than tax planning. Asset protection is essential in intergenerational wealth transfer. Next generation is younger and more entrepreneurial. 

 

Philanthropy and Sustainability. Very diverse philanthropic causes. Extremely important to include the next generation. Varied opinion in remaining anonymous. Varying amount of involvement or commitment to philanthropy. Intrinsic link to green and sustainable philanthropy. 

 

Global Citizen. Explosion in growth of global citizens. Increasing complexity of global citizens. Global citizens driven by lifestyle rather than tax. Political safety a key influence. Proximity to the UK a distinct advantage. Emotional link with home country important. 

 

Coronavirus COVID-19 Pandemic. The impact of coronavirus COVID-19, whilst sudden and unprecedented, has shown that the Isle of Man’s private wealth professionals and businesses are resilient, adaptable and were generally well prepared. As a consequence, the Island’s private wealth sector and its private clients will hopefully successfully emerge from this pandemic on a positive path. 

 

The Future. Still concern and uncertainty over Brexit. Geopolitics never more interesting. Strong regulation is positive but also a burden for service providers. Political and economic stability of the jurisdiction is crucial for the successful future. Further consolidation of the private wealth service providers.

Sponsors of the Isle of Man Private Wealth Report 2020/21

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