With a stellar reputation in the private client and trust industry, Steve Meiklejohn, Global Senior Partner at law firm Ogier, has seen dramatic changes in the sector in recent years, and believes that they’ve worked in the Channel Islands’ favour
Run us through your career history in 60 seconds.
I qualified as an English barrister in 1981, then came back to Jersey and started as a humble legal assistant at Ogier and Le Cornu in 1983, qualifying as a Jersey Advocate in 1985. I became a Partner in 1988 and have been here ever since.
In terms of work, I had a typical mixed practice between 1985 and 1996, acting for private and corporate clients in a variety of matters, from selling businesses to applying for liquor licences. I also did a smattering of general litigation and a significant amount of criminal and matrimonial work.
The legal world started specialising in the mid-90s, at which point I embarked on my career as an international private client and trust lawyer. I led our trust advisory group until a few years ago, and although I’ve handed over the reins, I’ve continued to be very much a trust and private client practitioner.
The most recent development is that I was elected by my fellow partners to become Ogier’s Global Senior Partner from the beginning of this year.
So what does your new role entail and will your job change as a result?
The role of Senior Partner depends on what a firm expects from it. At Ogier, it’s not a direct management role. I see it as more of a figurehead for the firm both internally and externally. For instance, I will chair the partner meetings through the year, and if there’s an internal issue I will be expected to get involved and sort it out.
Externally I have a role in representing the firm in its relationships with the media, regulatory bodies, intermediaries in London and elsewhere, and making comments on behalf of the firm. The role suits me because it means my responsibility to clients hasn’t changed and I continue to do as much client work as last year – acting for clients is where I get most enjoyment.
How has the private client and trust space changed in the time you’ve worked in it?
In one regard it hasn’t changed, in that it’s all to do with helping high-net-worth families create structures that enable their wealth to be transferred from one generation to another.
What’s different is how the work has been internationalised. We’re now very aware of the opportunities in the Far East, Middle East and South America, more so than 20 years ago when you were acting for clients from these regions but weren’t overly aware or necessarily interested in their tax and general regimes.
These days you need to be very aware of what is possible for a family from another region, in terms of being able to use an offshore structure – so the level of understanding and awareness of offshore practitioners has to be greater.
The other side is the big difference in regulation. It’s astonishing when you think back 20 years – we didn’t have any anti-money laundering rules per se, so you would just take at face value a client or family coming to you from another part of the world to set up a trust in Jersey. And there were no rules impinging on your ability to set up that structure and there were no rules necessarily impinging on that client in the country where he or she lived.
Now that’s all changed. Starting with the Proceeds of Crime Law being introduced in Jersey in 1999, we’ve had countless further regulatory changes. And from September of next year there’s going to be an obligation for a Channel Island service provider under the Common Reporting Standard to provide a minimum amount of information to the tax authorities of any given client’s home country.
We’re moving into a world where there is going to be almost complete transparency in terms of a client’s personal tax affairs and an exposure to what that client has established in relation to their personal wealth. That’s the fundamental difference.
Regulatory change has seemed relentless in recent years. How’s it felt from the inside?
The pace certainly seems to have quickened since the beginning of the financial crisis, as governments have sought ever more desperately to collect additional taxes. It’s not surprising that there would be a focus on tax evasion and even tax avoidance, but I don’t think this represents a massive threat to the Crown Dependencies, or indeed some of the Overseas Territories that our firm practises in – the main ones being Cayman and the BVI. Ever since 1998, when the OECD started its focus on voluntary disclosure of information, those territories have responded very positively to all the initiatives.
So while the pace has quickened – with FATCA, CRS, the IGA with the UK, and particularly the EU money-laundering directive, for instance – all of these things, in many ways, play to the strength of these jurisdictions. We’ve made sure we’ve introduced a set of rules in this area, whether that’s collection of data or regulation of trust companies, that are seen to work and which are enforced.
And what of the way the Channel Islands have been reported in the press lately, being lumped in with the likes of Panama?
The level of bad reporting we’ve seen is rather depressing, particularly coming out of the UK. The reality, as we know, is somewhat different in the quality of business done in the islands, the quality of regulation and so on.
The good news is that the people who matter – the UK, and to some extent the US government, and the EU – have been made aware of and do understand that the standards observed in our locations are higher than the standards adopted and observed by many of the member countries of the EU and the G20.
Does the success of the Channel Islands depend on demonstrating the quality of the services and products available?
You’ve hit the nail on the head there. The quality of service, quality of the jurisdiction and its practitioners are key. If you look across most offshore jurisdictions, we’ve all made tweaks, enhancements, improvements to our legislation, be it trusts, companies, limited partnerships or the introduction of foundations. These are the products, so to speak. Most offshore jurisdictions broadly offer the same things.
So if a family is looking to set up a structure, they have a whole world of options available. In most cases, the Crown Dependencies will be the jurisdictions of choice when UK intermediaries are looking to place a client, and there’s a reason for that.
In our field, in Jersey alone, you’ve probably got five or six leading law firms, most of the main accountancy firms are here, there’s a good range of banks, we have investment managers on the island as well, and we have a very well-regarded court system, with judges of the highest calibre. It seems to me that those continue to be the really important factors when we offer our services to families.
How important is a global footprint to a firm such as yours?
It’s important because, as a group of Jersey partners, it enables us to hedge our risks by diversifying jurisdictions.
But looking at it as regards what we can offer a client, if we can sell ourselves as global offshore lawyers we can come across as much more well-balanced advisers and less partisan, and not simply pitching for the island we’re in. We can place a client in whichever offshore location we think is best for that client.
In recent years we’ve recognised that it would be beneficial to clients if we were in jurisdictions that weren’t purely offshore – hence Ogier’s move into Luxembourg, China and Hong Kong. I certainly think that’s why the bigger firms globalise.
Some firms are globalising through M&As, and there’s been a lot of activity in the private client and trust space. What’s your take on that?
I look at it from the outside and I think it’s good for the offshore world. Certainly a lot of it has emanated from Jersey because a lot of acquisitive businesses have been headquartered here. It’s good because it demonstrates huge confidence on the part of investors in the administration model and indeed in the offshore model.
That doesn’t mean there aren’t concerns about the level of activity. You talk to some employees in these businesses and they express nervousness. Does this mean there will be some rationalisation of business and redundancies?
People quite rightly are afraid of that. People also worry that client service might be affected because the private equity model, in particular, would suggest a further sale of a business within three to five years. Might that represent a threat to the quality of service that’s offered to the client?
On the other side of the coin, when you have serious investors coming in from private equity firms, there’s a real desire to further professionalise the offering of trust companies, to drive up corporate governance standards and service levels, and that’s got to be good for offshore. So overall, I’m encouraged by recent activity.
What we’re also seeing is that there are senior teams coming out of those larger firms, who are setting up their own, smaller operations, so clients continue to have choice. We’re not just ending up with mega-trust companies, we’re seeing smaller firms establishing themselves that have very good reputations with intermediaries in the UK, offering real choice to clients in terms of the size of firms they might go to.
Also you have some of the smaller firms coming together – so you have somewhere with five or six members of staff joining together with two other firms of a similar size. Suddenly you have a firm that has a bit more substance, with 20 members of staff. They’re able to present a much more professional image in order to compete with the big boys.
If you had supreme power, what changes would you make to the private client and trust industry in the Channel Islands?
I actually think that things are working pretty well. There have been changes already – in Jersey we’ve just concluded the consultation in relation to potentially the seventh change to our trust law, and I expect a draft law will be published this year.
And the government has definitely upped its game in the past five years in responding to requests from industry for the introduction of a new product or service, or to make a change to one of our main laws to make us more attractive.
The one blot on the landscape for me has been that we had a new charities law a few years ago. That hasn’t been fully introduced – cost constraints have prevented government from fully bringing it in. That law could have had benefits – we could present the island as a centre for expertise in the charitable and philanthropic sector. So I’d give the government a kick on that, but other than that we’re in good shape.
What impact do you feel Brexit is going to have on private client business in the Channel Islands?
Overall, I’m not expecting Brexit to have a significant impact on private client work in the CDOTs. If anything, Brexit could have a knock-on benefit. One question being asked is whether the UK government is going to be so focused on Brexit changes that it will have to put back the non-doms changes planned for April.
My feeling is they will probably push on with the changes – so in the short term offshore businesses in any event are likely to have more work as clients are advised to make changes to their structures.
How do you see the next 24 months in the private client and trust space in the islands?
While there have been huge regulatory changes in the past 20 years, the nature of the work we do has remained much the same. That will continue to be the case. With wealth generally increasing around the world, the need for the private client industry will always be there.
I’m confident we have a very good future, and there are opportunities. Wealth is being made in the fintech area, and the digital sector is growing. These are going to throw up opportunities in the private client world, in that there will be new clients who will need their wealth structuring.
And as the world becomes more digital and technology driven, the way we deliver our services will change – and that applies across all financial services, not just the private client sector. All in all, I’m optimistic we are well placed to deal with whatever comes our way.
FACT FILE
Name: Steve Meiklejohn
Age: 56
Position: Global Senior Partner, Ogier
Married to: Lisa
Children: Sam (26), Alex (24) and Iain (19)
Hobbies: Keeping fit
Interesting fact: I once represented Shaun Ryder, the lead singer of the Happy Mondays, in what was then Jersey’s police court.