Offshore Financial Services in Jersey

Introduction

With money leaving offshore centers in the billions, understanding the nature of offshore clients and what strategies to employ to attract and retain them has become absolutely critical, not just for offshore bankers but also for their onshore competitors.

Scope

*This report draws on the findings of the Offshore Banks Survey 2010.

*This survey was conducted in February/March 2010 among banks in Jersey, Guernsey, the Isle of Man, Switzerland, Hong Kong and Singapore.

Highlights

Out of all offshore clients by assets under management, 69% are from Western Europe, and 57% of these are from the UK.

The most important reason that British offshore clients choose to bank in the islands is because they get a more personalized service compared with onshore banking.

The average offshore client has 37% of his holdings in cash and near-cash, and this is expected to fall to 32% in two years' time.

Reasons to Purchase

*Understand the nature of offshore clients in Jersey.

*Gain insight into the future needs of offshore clients.

*Access strategies for success in the marketplace.


Report Highlights

[Studien Infos ausblenden]

Overview 1
Catalyst 1
Summary 1
Methodology 1
Executive Summary 2
Many of the offshore clients of banks in the islands are British and enjoy the personalized service offered by these banks 2
Offshore clients are looking for fundamental offshore services from their banks 2
Jersey bankers need to focus on brand, image and reputation as well as advisory services 2
Table of Contents 3
Table of Figures 4
Table of Tables 5
Offshore Clients of Jersey, Guernsey and the IoM 6
A significant number of clients on the islands and Jersey are from Western Europe, especially the UK 6
The three island centers service a very Western European offshore clientele 6
Jersey focus: Jersey has a high concentration of Western European clients 6
Britons are very important to the island banks, but not uniformly important 7
Jersey focus: British offshore investors have more assets under management in Jersey than the other centers 8
Historic links with Hong Kong make this region particularly important to banks in the islands 9
Jersey focus: Indians are well represented among the Asian client segment 9
Offshore clients bank on the islands because they get a more personalized service than they would onshore 11
UK clients that put their money in the islands are attracted to the islands because they get a more personalized service 11
Jersey focus: Jersey clients find offshore banking convenient because they are 'on the move' 11
The average portfolio of an offshore client is very conservative in nature, and this is not expected to change much going forward 13
Cash and near-cash is the most important asset category in the portfolios of offshore clients of banks in the islands 13
Jersey focus: Jersey clients invest more in real estate than elsewhere 13
Offshore clients of banks in the islands are expected to make small adjustments to their portfolios going forward 14
Jersey focus: the portfolios of Jersey's offshore clients are expected to change very little over the next two years 15
Offshore clients are not likely to move center or bank and have little appetite for risk 16
Offshore clients of banks on the islands are not prone to switching 16
Jersey focus: Jersey clients are value-conscious but loyal to their offshore bankers 16
The appetite for risk among offshore clients has dropped and is unlikely to recover much going forward 18
Offshore clients on the islands tend to have created their own wealth 19
The single most important source of wealth among offshore clients is business/entrepreneurship 19
Jersey focus: most Jersey clients have sourced their wealth through business/entrepreneurship 20
The Competitive Environment in the Islands and Jersey 22
Offshore clients of banks in the islands are looking for the basics from their banks 22
Offshore clients place a great deal of importance on the brand, image and reputation of providers when deciding who to bank with 22
Jersey focus: Jersey clients are focused on the same reasons as others for choosing an offshore bank 22
Tax prosecutions and amnesties are not the main reason that offshore clients might leave their bank 24
Change in personal circumstances is the number one reason for client defection from their bank 24
Jersey focus: a lack of proactive advice is a key reason for offshore investors to leave a bank 24
Offshore clients of banks in the islands are relatively light users of online services 26
Offshore clients do not make intensive use of online services from their bank 26
Jersey focus: the majority of Jersey clients use online services less than one time per week 26
Island bankers think that their clients will be looking for low-risk products in two years' time, and that the greatest opportunity lies in discretionary asset management 28
The expectation is that offshore clients will still be looking for products and services geared towards wealth preservation in two years' time 28
Jersey focus: capital-protected products and tax planning and advice should see strong demand from Jersey clients in two years' time 28
Discretionary asset management is seen as the best way for banks to attract new offshore business 30
Jersey focus: offshore bankers in Jersey see their advisory role as pivotal to attracting new clients 31
For basic accounts, offshore clients are interested in one key feature: high interest rates 33
High interest rates are very important both for savings and deposit accounts in the islands 33
Jersey focus: Jersey's offshore clients value higher interest rates and multiple currency accounts when assessing savings and deposit accounts 34
Strategies for Success in Jersey 37
Jersey bankers identify core offshore services as being key to keeping clients 37
Datamonitor identifies eight key strategies that Jersey bankers should pursue for success in their marketplace 39
Strategy one: excel at key offshore services 40
Strategy two: improve brand, image and reputation 40
Strategy three: recognize clients' risk profiles and encourage diversification 41
Strategy four: offer competitive interest rates, and (again) try to move clients on from basic products 41
Strategy five: address the need for a greater advisory role 41
Strategy six: market more widely than the existing client base 42
Strategy seven: understand the source of clients' wealth and cater to it 42
Strategy eight: recognize that online services are important for some clients 42
Competitive Analysis: the Offerings of Offshore Banks on Jersey 43
Bank account excellence is an essential feature of an offshore bank offering 45
Offshore banks need to offer a good range of basic banking products at a low cost for the convenience of their clients 45
Competitive interest rates: peer review versus best-in-class 46
For many investors, investment excellence is paramount as they want a range of investment products and professional advice from their offshore bank 48
Customer service is critical to an offshore bank's offering but difficult to define precisely, and overlaps with other key features 49
Technology excellence is a key feature of an offshore bank that has clients 'on the move' 51
Appendix 54
Definitions 54
Domicile 54
Offshore 54
Tax amnesty 54
Methodology 54
Further reading 54
Ask the analyst 54
Datamonitor consulting 54
Disclaimer 55
List of Tables
Table 1: In terms of assets under management, approximately what percentage of your offshore clients live in the following regions? 7
Table 2: In terms of assets under management, what percentage of your Western Europe-based clients live in these countries? 9
Table 3: In terms of assets under management, what percentage of your Asia-based clients live in these countries? 10
Table 4: Thinking about your clients living in the UK, what are their main motivations for putting money offshore? (Choose top three reasons) 13
Table 5: Around what proportion of your offshore client base's assets under management are allocated to the following five asset categories today? 14
Table 6: Around what proportion of your offshore client base's assets under management do you expect to be allocated to the following five asset categories in two years' time? 16
Table 7: On a scale of 1-4, please rate your offshore client base in the islands overall for the following attributes (1 = very low, 4 = very high) 18
Table 8: On a scale of 1 to 4, please rate your offshore clients in the islands in terms of appetite for risk (1 = significantly lower, 4 = significantly higher) 19
Table 9: Around what proportion of your offshore client base in the islands accumulated their wealth through the following means? 21
Table 10: Why did your offshore clients choose your bank? (Choose top three reasons) 23
Table 11: What are the most likely reasons for offshore clients to leave your bank? (Choose top three reasons) 26
Table 12: How often do most of your offshore clients in the islands use your online services? 27
Table 13: On a scale of 1-4, please rate the following products and services in terms of expected demand from your offshore clients in two years' time (1 = no demand, 4 = a lot of demand) 30
Table 14: Which products and services are most likely to attract new offshore business to your bank? (Choose top three products and services) 33
Table 15: What features of deposit accounts will be most important to your offshore clients in the next year? (Choose top two features) 35
Table 16: What features of savings accounts will be most important to your offshore clients in the next year? (Choose top two features) 36
Table 17: What is the best way to ensure that your offshore client base keeps its wealth with you offshore? (Choose one) 39
Table 18: Characteristics of offshore clients of Jersey and suggested strategies for targeting them 40
Table 19: Five offshore banks located in Jersey were selected for a peer review 44
Table 20: Banking excellence embraces a comprehensive set of principles 45
Table 21: Interest rates are relatively low in the offshore Jersey banks reviewed 47
Table 22: Highest-earning offshore no-notice accounts, May 2010 48
Table 23: Highest-earning offshore notice account interest rates, May 2010 48
Table 24: Most Jersey banks reviewed offer a good range of investment products and services 49
Table 25: Offshore banks in Jersey tend to offer relationship managers to premier customers 51
Table 26: All the Jersey banks reviewed offer transactional websites to their offshore clients 53
List of Figures
Figure 1: In terms of assets under management, most offshore clients of banks in the islands are from Western Europe 7
Figure 2: In terms of assets under management, most Western Europe-based clients of banks in the islands live in the UK 8
Figure 3: In terms of assets under management, most Asia-based clients of banks in the islands live in Hong Kong 10
Figure 4: One of the most important reasons that clients from the UK put money in the islands is because they get a more personalized service than from onshore banks 12
Figure 5: The portfolios of offshore clients of banks in the islands are weighted towards cash or near-cash products 14
Figure 6: In two years' time, cash or near-cash products will be the largest asset category within the portfolios of offshore clients of banks in the islands 15
Figure 7: Offshore clients of banks in the islands are rated very highly in terms of their intention to keep assets under management offshore 17
Figure 8: The risk appetite of offshore clients of banks in the islands is not expected to change much in the next two years 19
Figure 9: The majority of the offshore clients of the islands accumulated their wealth through business/entrepreneurship 20
Figure 10: The most important factor in offshore clients' choice of bank is brand, image and reputation 23
Figure 11: The most likely reason for an offshore client in the islands to leave their bank is changes in their personal circumstances 25
Figure 12: A significant proportion of offshore clients of banks in the islands never use online services 27
Figure 13: In two years' time, offshore clients of banks in the islands are expected to show the strongest demand for capital-protected funds or bonds 29
Figure 14: Discretionary asset management is expected to attract the most new offshore business for banks in the islands 32
Figure 15: The feature of deposit accounts expected to be most important to offshore clients of banks in the islands is highest interest rate 34
Figure 16: The feature of savings accounts expected to be most important to offshore clients of banks in the islands will be highest interest rate 35
Figure 17: The best way to ensure offshore clients keep their wealth where it is, according to bankers in the islands, is to provide superior service 38

[Inhaltsverzeichnis ausblenden]