Framing the decision

Jurisdiction selection is clearly important, after all, it’s the place(s) that ‘house’ the wealth holding structure(s), so that house had better be in order, robust, flexible and able to withstand various risks in the future. It can play a key role in mitigating fundamental family risks – around taxation, for instance, but also around asset protection and the potential for unforeseen litigation, forced heirship, marital breakdowns, privacy and succession planning issues.

Trends in recent years have brought these issues increasingly to the fore – specifically the greater complexity of the makeup of families, greater complexity in family demographics, and greater complexity in geographical interests. Industry figures support this, with the majority (73%) of family offices expecting there to be an expansion in the number of family offices worldwide in the future and 55% anticipating that families will adopt greater asset class and geographic investment portfolio diversification (Deloitte Private Global Family Insights Series, September 2024).

This all means that achieving a family’s risk objectives has become more and more challenging – and jurisdictional selection is at the heart of that.

As a result, today, top of the wish-list for advisors when it comes to supporting families with jurisdictional decisions is ensuring that their jurisdictional partners are strong and robust but with an element of flexibility built in too, so that a family can be agile and ready to respond quickly to shifting future conditions.

The jurisdictional picture, though, is not straightforward either, at least at first glance or to the layperson. Many jurisdictions now promote themselves as “family office destinations” or “asset protection” jurisdictions citing local rules with regard to regulation exemptions or statutory limitation periods. These types of exemptions and statutes, though, are now fairly common as many jurisdictions tend to learn and indeed copy from one another, at least from a legislative and regulatory perspective.

The result is a landscape of onshore – normally a family’s home country; offshore – such as Jersey, Cayman etc; and increasingly ‘mid-shore’ jurisdictions, all of which offer a family something slightly different.

The emergence of the mid-shore option is particularly interesting – having recognisable technical and practical attributes of both onshore and offshore locations.  The USA, as well as perhaps Switzerland and Singapore, are common examples. There are technical legal or tax reasons for incorporating a mid-shore option into a family’s structure, as well as more subjective or perception-based criteria too.

Overall, it’s clear that greater family complexity alongside an evolving jurisdictional landscape has put jurisdictional selection front and centre of family structuring decisions. Considering a family’s context and bespoke needs will be key in coming to a sensible conclusion.

The balanced scorecard

Often families will make jurisdictional decisions based on familiarity, existing connections and their own perceptions – after all that’s human nature. But adopting a ‘balanced scorecard’ approach can be a helpful way to come to a rational and objective decision, free of human bias or inadvertent ignorance of the options open to them.

A balanced scorecard, by definition, normally includes a number of relevant criteria, which then are analysed and importantly prioritised for a particular family’s facts and circumstances.  Key criteria for a balanced scorecard framework would typically include:

• Regulatory framework: the main role of a jurisdiction’s regulator is the security of the family’s assets and data, so important, yet often overlooked – they ensure the licencing of local trust companies & other professionals and ensure they are fit and proper, along with ensuring money laundering and proceeds of crime etc are properly protected against. Local regulation may also provide for important exemptions and frameworks for various wealth vehicles like Private Trust Companies (PTCs) (or similar) and/or investment advice for a single-family group. So clearly it’s important to assess the jurisdiction’s regulations as to whether they satisfactorily provide security for a family’s assets and information, what are its anti-money laundering credentials, and does it meet high standards when it comes to licensing providers?
• Legal structuring tools & framework: legal or tax advice normally includes a specific type of vehicle to hold and administer that particular family’s wealth, and these range from trusts and holding companies (most common) to limited partnerships, to PTCs, to segregated cell companies and more. As mentioned above, many jurisdictions have essentially ‘borrowed’ wealth vehicles from one another into their local legislation. So, naturally the question arises as to which jurisdiction(s) offer the right sort of modern and flexible vehicles and related legal framework which best meet the need of the advice?  For example, local legislative and/or jurisprudence clarity as to perpetuity periods, firewall legislation, settlor/grantor reservation of powers, purpose trusts, fraudulent conveyance rules and limitation periods, settlor/grantor capacity guidance, and other.
• Quality of court/judiciary: the importance of the rule of law cannot be overstated, particularly with the challenges and uncertainty in this regard in many parts of the world. Local courts and its judiciary are of course fundamental and key in ensuring this happens in practice. The questions/criteria to ask about here include history of integrity, quality and fairness of the local judiciary, and also have the legal structuring tools referred to above been sufficiently tested and/or clarified? Also, what and where is the ultimate court (e.g. Privy Council or other)?
• Quality of local firms and people: whilst jurisdictions provide the legal framework and ‘home’ for the legal tools needed, jurisdictions themselves by definition do not ‘run’ those legal structures – that is done by local licenced trust companies and other professional firms, or put another way, by real people, systems and processes. The quality of those local firms and people is thus a major risk mitigating factor for any wealth holding structure. So, the question/criteria arises as to whether or not there is an abundance of high quality trust companies and local professional expertise in the jurisdictions? This in practice varies, often considerably, between jurisdictions.  It often says a lot about a particular jurisdiction as to what firms have decided to set up shop there.
• Proximity and connectivity: ease and frequency of communication, including in-person, is often a key ingredient in any wealth holding structure, regardless of its components. So it naturally follows as to whether the jurisdiction offers good physical and digital connectivity (for the particular family members and their advisors) and communication, and can it demonstrate good digital infrastructure resilience?
• Tax regime: taxation is of course important given it’s depleting effect on family wealth, but particularly punitive, confiscatory, draconian and/or double taxation, which often many occur and gets quite complex in cross-border family and asset situations. This is why most advisors will seek a tax-neutral (low or no tax) jurisdiction as a central base of the family’s wealth, to simplify matters for the family, and then focus on tax compliance and legitimate planning based on where individual family members are resident and/or where assets are located. In some cases, a jurisdiction’s tax treaties may also be relevant.
• Privacy and confidentiality laws: ensuring privacy of one’s personal information, including wealth, is paramount for the safety and security of many families worldwide, save for legitimate and secure sharing of information for tax, regulatory or other compliance requirements. Many argue this is a human right, which is supported by, for example, the right to privacy and private life that is enshrined in certain declarations and conventions in the European Union.  This criteria understandably remains often a top concern globally for wealthy and other families for a number of reasons, including political or social instability in home countries and the related fear of physical safety of family members as well as undesired and unnecessary general public attention to private matters, particularly (but not only) for high profile or celebrity UHNW persons.  So naturally it’s important to consider a jurisdiction’s privacy and confidentiality laws and its reporting rules.
• Family home country rules: in many cases, the family members’ home countries (where they live) ,and/or the places where family assets are located, often have tax regimes that dictate, restrict and/or otherwise discourage use of certain jurisdictions. So its important to know, from a tax compliance point of view, which jurisdictions are or may be ‘off the list’ so to speak and then focus on others that are ok to consider.
• Other Connected Jurisdictions: here’s one that many miss…what on the surface may appear like one jurisdiction under consideration, may in fact be more than one or even multiple. Its very important to understand the full jurisdictional picture and thus exposure.  This often, albeit inadvertent, multi-jurisdictional exposure has arisen in good part via many, mainly larger, trust companies that have in recent years outsourced a number of trustee duties and functions to related and/or unrelated companies in other, normally lower-cost, jurisdictions (e.g. bookkeeping, accounting, payments and other).  This normally requires local regulatory approval.  It would naturally follow that many, if not most of the criteria outlined here, ought to be also applied to such additional jurisdictions where applicable (e.g. is quality being compromised and/or is privacy risk exposure unnecessarily increased?).
• Political, social and economic stability: our world today, and indeed throughout history, has varying degrees of political, social and/or economic instability, which in turn is one of the risks families seek to mitigate to preserve their wealth. Accordingly, any jurisdiction in which wealth is structured must have a proven history of stability in this regard, but also ‘levers’ built in to allow for a change in jurisdiction where this stability erodes or otherwise comes into question.
• Cultural affinities: wealthy families are human after all, and like all humans they have natural tendencies and affinities, which for a jurisdiction to house wealth may include particularly strong personal cultural, societal, linguistic or other affinity with a specific location.
• Global ranking indexes: all of the criterial thus far are normally assessed by an advisor on a case by case basis, but there are certain independent rankings available that can evidence a jurisdiction’s particular qualities, like the Global Financial Centres Index (GFCI). That said, these are normally higher level finance rankings, i.e. beyond wealth structuring, so their limitations should also be noted.
• Intergovernmental agencies: jurisdictions globally are often, but to varying degrees, exposed and susceptible to implications arising from views of various intergovernmental agencies like the OECD or FATF (e.g. so-called “black” or “grey” lists), so it’s prudent to also consider what those organisations have to say (or how they categorise) the jurisdictions under consideration.
• Personal experience: finally, again, families and their advisors are only human and their own experiences, connections and knowledge, even where limited or lacking, often forms an important basis for considering jurisdictions, which can be either helpful or a detriment, but nonetheless should be considered.

Note that “cost” is not part of the criteria above.  There is of course a rationale and practical reason for its exclusion. Simply put, when applying the criteria above applies in a poor score or assessment, most often the average cost in that jurisdiction is low, and vice versa when the score is high.  That’s simply how supply and demand works.

This scorecard approach is very helpful in bringing together the multiple considerations at play to help a family to choose a jurisdiction that can enable it to meet its objectives.

It’s also important, however, to consider the holistic picture. Typically, a family structure will include a central head office and operational hub; it will include holding structures, such as trust and foundation vehicles; and it will include an investment analysis and allocation function. All of these are critical components of the family operation and may well require different jurisdictional qualities – but it is important to consider how the different jurisdictional elements come together, to ensure seamless integration and minimal disruption.

As families look to the future, jurisdictional selection will be critical in enabling them to achieve their objectives. Getting it wrong can be costly, disruptive, and leave a family open to future challenges and other risks. Adopting a balanced and objective approach, however, can help diversify and mitigate risks, and provide a good level of certainty and reassurance in meeting long-term estate and succession planning ambitions.

Crestbridge Family Office Services (FOS) Assistant Manager Tallie Renouf has received further industry recognition, being included in a list identifying future leaders within the private client industry across the UK and Crown Dependencies.

Tallie is one of the industry’s stand-out young talents recognised in the latest ‘UK and Crown Dependencies NextGen Leaders List’, published this month by eprivateclient (8 September).  Through her inclusion in the national list, she is noted as combining a strong academic record and class topping exam results with a firm commitment to continuous self-improvement and professional development.

Tallie works on a number of the firm’s dynamic and complex structures, providing support to Crestbridge’s team of directors, while she has also taken on the role of mentor to other emerging talent in the team and helps with the organisation of various initiatives as part of firm’s charity committee.

The annual list from eprivateclient recognises and celebrates young practitioners working in diverse areas of the private client sector across the entirety of the UK as well as Jersey, Guernsey and the Isle of Man. In compiling the list, judges consider a number of factors, including expertise, achievements over the past year, career progression and company performance.

Tallie was also featured in eprivateclient’s ‘Channel Islands NextGen Leaders List’, published in June.

Commenting on Tallie’s latest success, Steve Le Seelleur, Managing Director, Crestbridge Family Office Services, said:

“Tallie embodies Crestbridge’s ethos, leading by example to bring intellect, aptitude and drive to our team. She fully deserves this national recognition, which builds on her success earlier this year. Being consistently included in initiatives like this is a reflection of the focus Crestbridge has on nurturing young talent and creating an environment where everyone can grow and thrive.”

Following the arrival of Steve Sokić as Chairman earlier this year and alongside CEO Heather Tibbo, Steve Le Seelleur brings further significant senior industry expertise to the independent and privately-owned private client trust and family office-focused firm, as it continues to pursue a strategy of growth.

In his role as Managing Director, Steve has responsibility for the performance of the business, working alongside Heather Tibbo and Steve Sokić to lead a team of highly talented and experienced trust professionals to ensure the delivery of exceptional client service. His arrival reflects Crestbridge FOS’s commitment to the sector, clients and future growth, with the firm having recorded strong organic growth since its inception in 2013, driven by its focus on attracting industry leading professionals, supporting top-end global families, and delivering innovative solutions to NextGen clients.

With more than 25 years’ experience in the fiduciary and wealth management industry, Steve is an experienced practitioner across multiple jurisdictions, with particular experience in the Middle East

Prior to joining Crestbridge FOS, Steve was Managing Director of the Jersey office of a private equity-owned global financial services business and before that was a Director and Member of the Executive Committee of HSBC Private Bank’s trust business in Jersey. He has also sat on the boards of Private Trust Companies and has vast experience managing structures with a wide variety of asset classes. He is an Associate of the Chartered Institute of Bankers.

Commenting on Steve’s appointment, Crestbridge FOS CEO Heather Tibbo said:

“Since establishing the business in 2013, our vision has always been to set new standards of technical expertise and service excellence within our discipline. A senior executive team that can clearly demonstrate those qualities is absolutely critical, and for that reason I’m delighted to welcome someone of Steve’s calibre to the business. The experience and knowledge he has gained throughout his -career, together with his proven ability to lead and develop teams and his belief in the importance of client service, will be invaluable as we continue to support our clients with their wealth planning needs and pursue our bold and ambitious growth plans.”

Steve Le Seelleur added:

“Crestbridge Family Office Services has earned a fantastic reputation in the trust, family office and UHNW private client space, and that is thanks to the quality of its people and the emphasis it places on service quality. It’s a privilege to be joining a business that shares my own values, that demonstrates such a positive people culture, and that has a really high-end portfolio of global clients.  I’m looking forward to working closely with Heather and Steve, as well as my colleagues right across the business, to help us achieve our collective goals.”

Steve Sokić succeeds John Harris, who will remain with the business in a senior advisor role.

Since Crestbridge Family Office Services’ inception in 2013, the independent and privately-owned private client trust and family office focused firm has made a commitment to continuously build on the foundations for growth, an ambition reflected in this new appointment.

Steve’s career within the family office, trust and asset structuring sectors spans over 25 years.  It has encompassed global executive management and client oversight roles at IQ EQ, Sanne Group PLC, Royal Bank of Canada and Deloitte.  Recognised as an insightful industry commentator, Steve is well known and respected in the private client and family office circles globally, which is also reflected in his recognition via a number of industry awards. He holds several professional qualifications including Chartered Professional Accountant (CPA) and Trust Estate Practitioner (TEP) and he is a tri-national of Canada, Croatia and Britain.

Steve commented:

“Clients’ needs have been and continue to be re-shaped by evolving regulatory, legal, tax, political and socio-economic factors, financial institutions and professional service providers must remain flexible and responsive.  Crestbridge Family Office Services has built a truly excellent business in the trust, family office and UHNW private client space and is strongly positioned to thrive in these new times.  It is my genuine pleasure and privilege to join Heather and her team in the next phase of their growth journey.”

Crestbridge Family Office CEO Heather Tibbo commented:

“This is an exciting announcement for our business. Since opening our doors in 2013, our vision has been to set new standards of technical expertise and service excellence within our discipline.  We are delighted to welcome an industry figure of Steve’s calibre, experience and truly global perspective, whose ambition and passion for the sector mirrors our own. We have bold plans for our future, and unquestionably we have the team to deliver them. We are thrilled to begin this new chapter for Crestbridge Family Office Services and for our clients and partners.”