Offshore Financial Services in the British Isles 2004: Industry Report

Offshore Financial Services in the British Isles 2004

Product Type: Market Research Report
Published by: Datamonitor
Published: September 2004
Product Code: R313-7089

Description

Introduction
Sizes, segments (retail v institutional) and forecasts (to 2006) the offshore deposits and mutual funds markets in Jersey, Guernsey and Isle of Man. Provides competitor insight on customer preferences, issues, trends and competitive dynamics based on a large scale B2B survey of the main players.

Scope
Combines industry opinion with Datamonitor's proprietary databases to analyze offshore deposits and mutual funds in Jersey, Guernsey and Isle of Man.
Datamonitor's Offshore Market Leaders Survey 2004 canvassed the opinion of 30 senior executives on the key issues facing the market.
Datamonitor's Offshore Database 2004 sizes and segments the offshore deposit and mutual funds industry in each British Isles jurisdiction.
Forecasts of each market are provided by Datamonitor's Global Offshore Database, providing an independent view on each jurisdiction to 2006.
Highlights
Measured by total assets (i.e. offshore deposits and mutual funds) Jersey is by far the largest of the British Isles offshore jurisdictions. At EUR329bn, it is more than twice the size of Guernsey and nearly ten times that of the Isle of Man. The latter, however, has been growing most quickly, at around 12% per annum since 1999.

Though competitors in the British Isles are relatively relaxed about the implications of the Patriot Act, more than 90% of executives surveyed see a negative impact arising from the EU Savings Tax Directive. Concerns centre not just on a loss of tax competitiveness, but on the effects of a perceived loss of confidentiality among clients.

Royal Bank of Scotland International is considered the biggest competitor in offshore deposits by its peers in the British Isles. Within mutual funds, Barclays Private Clients is seen as the leading competitor. Neither, however, are viewed as the most innovative.

Reasons to Purchase
Quantify the potential of your sector using our offshore deposits and funds market sizing and segmentation
Assess the future of your market with our forecasts to 2006
Design your marketing and product innovations around our source of deposits and funds data and survey results

Table of Contents

TABLE OF CONTENTS

CHAPTER 1 INTRODUCTION 10

What is this report about? 10

Who is the target reader? 10

How to use this report? 10

CHAPTER 2 MARKET CONTEXT 12

Introduction 12

The offshore deposits and mutual funds market, 1999-2003 12

Market size of British Isles offshore markets, 1999-2003 12

Retail versus institutional deposits and mutual funds, 2003 13

Market growth in Guernsey, 1999-2003 14

Market growth in Jersey, 1999-2003 15

Market growth in the Isle of Man, 1999-2003 16

Regulation and taxation 17

Guernsey 18

Jersey 19

Isle of Man 20

The Patriot Act 22

European Savings Tax Directive 23

Data tables 31

CHAPTER 3 CUSTOMER FOCUS 36

Introduction 36

Source of offshore deposits and funds, 2003 36

Average wealth held by customers of British Isles offshore competitors 39

Features demanded by offshore clients in the British Isles 40

Current source of business 42

Data tables 43

CHAPTER 4 COMPETITIVE DYNAMICS 46

Introduction 46

The main players in the British Isles offshore financial services 46

The British Isles’ most innovative offshore providers 48

Competitor profiles 51

Liberty Ermitage 51

Close Wealth Management 53

HSBC 56

Barclays Private Clients and International 58

CHAPTER 5 THE FUTURE DECODED 63

Introduction 63

Future threats and opportunities 63

Biggest threats to the British Isles offshore financial services 63

Best opportunities in offshore financial services in the British Isles 65

Most likely to gain market share 67

The British Isles offshore deposits and mutual funds market, 2004-6 69

Market growth, 2004-6 69

Likely changes to geographic source of business 72

Data tables 75

CHAPTER 6 APPENDIX 78

Definitions 78

Research methodology 78

Offshore data 78

Forecast methodology 78

Offshore Market Leaders Survey 80

Further reading 80

Datamonitor Global Wealth Service SPP: Reports 80

Datamonitor Global Wealth Service SPP: Insight Reports 81

Datamonitor Global Wealth Service SPP: Competitor Tracking 81

Datamonitor Savings & Investments SPP Reports 81

SPP Team 82

LIST OF TABLES

Table 1: Key personal taxation rates in British Isles jurisdictions, August 2004 18

Table 2: Comparison of Britannia International and Alliance & Leicester deferred interest accounts, August 2004 30

Table 3: Deposits and investment funds held in Guernsey by type of client, 1999-2003 31

Table 4: Deposits and investment funds held in the Isle of Man by type of client, 1999-2003 32

Table 5: Deposits and investment funds held in Jersey by type of client, 1999-2003 32

Table 6: What effect do you think the Patriot Act will have on your jurisdiction? 33

Table 7: What impact do you think the EU Savings Tax Directive will have on your jurisdiction? 33

Table 8: Have you formally communicated the EU Savings Tax Directive and its implication to your clients? 34

Table 9: If you have not yet, do you plan to do this formally? 34

Table 10: Are specialized products being developed in your jurisdiction to mitigate the EU Savings Tax Directive? 34

Table 11: Location of registered offices in British Isles jurisdictions of leading offshore players in the region 35

Table 12: What would you say is the average wealth of your offshore customer base? 43

Table 13: What are the three most important features that your [local/expatriate/corporate] customers look for when choosing you as their financial services provider? 44

Table 14: Geographic source of offshore deposits by British Isles jurisdiction, 2003 44

Table 15: Geographic source of offshore mutual funds by British Isles jurisdiction, 2003 45

Table 16: Liberty Ermitage fund of hedge funds range 53

Table 17: CWM’s list of employee services clients as of November 2003 55

Table 18: What will be the biggest threat to offshore revenues in your jurisdiction in the next two years? 75

Table 19: What will make it hardest for competitors in your jurisdiction to gain more offshore clients in the next two years? 76

Table 20: Thinking about opportunities in your offshore market, what will be the best way to increase revenues in your jurisdiction in the next two years? 76

Table 21: What will be the best way to gain more offshore clients in your jurisdiction in the next two years? 77

Table 22: Forecast size of British Isles offshore deposits market 2002-6f 77

Table 23: Forecast size of British Isles offshore mutual funds market 2002-6f 77

LIST OF FIGURES

Figure 1: Having grown total assets by EUR72.5bn since 1999, Jersey remains the dominant offshore centre in the British Isles 13

Figure 2: Retail rather than instituitional assets represent the dominant share of assets for each British Isles jurisdiction in 2003 14

Figure 3: Inflows of institutional fund business has been the main spur to growth in the Guernsey offshore sector 1999-2003 15

Figure 4: Jersey has benefited from strong growth in offshore retail deposit business between 1999-2003 16

Figure 5: Isle of Man offshore assets are increasingly dominated by retail deposits, 1999-2003 17

Figure 6: Offshore competitors in the British Isles are much more concerned about the impact of the EU Savings Tax Directive than that of the Patriot Act 25

Figure 7: Around one in four offshore providers in the British Isles have not formally communicated the impact of the EU Savings Directive and have no intention of doing so 27

Figure 8: Most offshore competitors in the British Isles are developing products to mitigate the effects of the EU Savings Tax Directive 28

Figure 9: UK clients accounted for around a quarter of total offshore assets held in Guernsey in 2003 36

Figure 10: UK and US clients together account for over two fifths of offshore assets held in Jersey in 2003 37

Figure 11: UK clients account for by far the greatest share of offshore assets held in the Isle of Man, 2003 38

Figure 12: The average customer wealth of British Isles offshore financial services providers is typically EUR100,000 - EUR500,000 39

Figure 13: Customer service, coupled with competitive rates and a strong brand are key in attracting local, expatriate and corporate customers 40

Figure 14: Royal Bank of Scotland International is considered the biggest competitor in offshore deposits by its peers in the British Isles 46

Figure 15: Barclays Private Clients is viewed as the biggest competitor for offshore mutual funds among its peers in the British Isles 47

Figure 16: HSBC and Abbey are considered the most innovative offshore deposit providers in the British Isles by their competitors 48

Figure 17: HSBC is considered the most innovative offshore mutual funds provider in the British Isles by its competitors 50

Figure 18: The threat of assets moving onshore in response to changes to taxation laws is seen as the biggest threat to offshore revenues in the British Isles over the next two years 63

Figure 19: The EU Savings Tax Directive is expected to be the biggest obstacle to growth in offshore business in the British Isles 64

Figure 20: Marketing has a key role to play in growing offshore revenues in the British Isles over the next two years 65

Figure 21: Partnerships with intermediaries are expected to provide the best way of gaining offshore clients in the next two years 66

Figure 22: Offshore providers in the British Isles expect HSBC and Royal Bank of Scotland to gain most market share in the next two years 68

Figure 23: In spite of regulatory change, the British Isles offshore deposit market is expected to continue growing through to 2006 70

Figure 24: Guernsey and Jersey are expected to generate strong growth in offshore mutual funds to 2006 71

Figure 25: Offshore competitors in the British Isles expect Middle Eastern clients to provide greatest impetus to growth 72

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