Forty years of trust excellence in Jersey - and counting

With trust law in Jersey celebrating its 40th birthday this year, we asked John Medina, Group Head of Private Wealth, about how the sector has evolved over the past four decades and its contribution to the island's finance industry.

I’ve had the pleasure of working in financial services for nearly 40 years and have seen the industry undergo massive change during this time. Back in the mid-80s, I don’t think anyone would have imagined we’d be using our mobile phones as digital wallets or to monitor investment portfolios.

At a deeper level, I’ve seen fundamental changes within the industry, including the arrival of ‘challenger’ banks, new investment products, and the range of structures available to private wealth clients.

The introduction of Jersey Trust Law

When I started my career in financial services, Jersey was already a recognised international financial centre (IFC), albeit one still finding its footing. At the time, the island's finance industry was dominated by banking, with around 50 of the world's top banks operating here.

The introduction of the Trusts (Jersey) Law 1984 was a pivotal moment. It established a robust legal framework that solidified Jersey's reputation as a premier jurisdiction for wealth and succession planning, and asset protection. Over the years, the value of assets held in Jersey structures has soared, with the island managing more than £1 trillion in global private wealth as of 2023, according to industry reports from Jersey Finance[1]. This underscores the significant role trusts and other structures play in the global economy.

The evolution of Jersey trusts

The world has shifted dramatically in the past 40 years, and Jersey’s trust law has evolved accordingly to remain relevant and continue to attract HNWIs and families from across the globe. Amendments such as the introduction of reserved powers provisions in 2006 have strengthened the island’s offering, allowing clients to retain certain decision-making powers and increasing flexibility.

Further consultations in 2024 continue to refine this legal framework, ensuring Jersey’s position as one of the leading jurisdictions for private wealth. These ongoing improvements are critical as Jersey competes globally with jurisdictions like the Cayman Islands and Singapore.

Innovations beyond trusts

Jersey’s innovative approach extends beyond trusts. The introduction of foundations under the Foundations (Jersey) Law 2009 provided international clients - especially those from civil law jurisdictions - with a flexible and easily understandable vehicle for wealth management and succession planning. Foundations have become a staple of Jersey’s private wealth toolkit, contributing significantly to the island's global attractiveness, with 400+ foundations formed in the five years since launch[2].

In addition, the launch of the Jersey Private Fund (JPF) framework in 2017 has revolutionised fund structuring for private wealth, offering speed and efficiency. Jersey now hosts almost 700 JPFs, according to Jersey Finance's H1 2024 statistics[3].

The wider impact on Jersey’s economy

Today, Jersey’s finance and legal sector directly employs 21% of the working population, demonstrating its vital role in the local economy[4]. The sector contributes around 40% of Jersey's GDP, underscoring the island's dependency on its status as a leading IFC[5].

Jersey’s commitment to adopting international standards in anti-money laundering and tax transparency has further cemented its reputation. Recognised by the OECD as a ‘cooperative jurisdiction’ MONEYVAL’s Mutual Evaluation Report in 2024 confirmed Jersey’s effectiveness in preventing financial crime is among the highest level found in jurisdictions evaluated worldwide. Jersey has also signed around 40 international tax agreements, reinforcing trust with global clients[6].

A global client base

When I started out, the vast majority of Jersey’s clients were UK-based, but today the island’s client base spans the globe, with significant activity in Europe, the Middle East, Asia and Africa. Praxis serves an international client base, reflecting the diverse origins of HNWIs who value Jersey's expertise.

Looking ahead

As the world continues to change, Jersey’s ability to innovate will remain its greatest asset. Technology, particularly fintech and AI, will play a pivotal role in shaping the future of the private wealth industry. Jersey is already making strides in areas such as blockchain for compliance and asset management, ensuring its relevance in the digital age. As history demonstrates, Jersey has a forward-thinking regulatory approach which sets the island apart and as it strives to be the easiest IFC to do business with remotely, in a digital world, this tradition looks set to continue.

One of the most fulfilling aspects of my role is mentoring the next generation of private wealth leaders. This NextGen will be instrumental in navigating the challenges and opportunities that lie ahead, ensuring Jersey remains a leader in global private wealth.

Reflecting on nearly four decades, it’s clear that Jersey’s evolution - driven by its legislative framework, global reach, and commitment to innovation - has been nothing short of transformative. I look forward to seeing how the island continues to lead the way in the next 40 years.

[1] https://www.jerseyfinance.je/jersey-the-finance-centre/sectors/private-wealth/

[2] https://www.jerseyfinance.je/jersey-the-finance-centre/sectors/private-wealth/

[3] https://www.jerseyfinance.je/our-work/2024-quarterly-reports-and-statistics/

[4] https://www.gov.je/SiteCollectionDocuments/Government%20and%20administration/Labour%20Market%20June%202024.pdf

[5] https://www.gov.je/SiteCollectionDocuments/Government%20and%20administration/GDP%20and%20GVA%202023.pdf

[6] https://www.gov.je/TaxesMoney/InternationalTaxAgreements/TIEA/Pages/TIEACountries.aspx

Please note that this article is intended to provide a general overview of the matters to which it relates. It is not intended as professional advice and should not be relied upon as such. Any engagement in respect of our professional services is subject to our standard terms and conditions of business and the provision of all necessary due diligence. © Praxis 2023