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Kroll Jersey managing director Ed Shorrock tells Emily Moore about the wide-ranging nature of the firm’s work and how Jersey can compete on the global stage
FROM investigating the butcher who was “importing more than just meat into the Island” to delving into the complex case of the former Nigerian army general who transferred millions of dollars of “tainted money” into Jersey bank accounts, Ed Shorrock’s career has been tremendously varied.
Having moved to the Island as an accountant in 1994, the managing director of Kroll Jersey says that, in many ways, the time of his relocation was “fortuitous”.
“It coincided with the start of the regulatory push and the creation of the Jersey Financial Services Commission in 1998, which drew my attention towards regulatory, insolvency, litigation support and investigation work,” he explained.
Further cementing this interest was a secondment at the Viscount’s Department, during which he not only investigated the aforementioned cases but also gained an insight into the “wild west” nature of certain financial services businesses which were operating at the time.
And it is these experiences – coupled with time spent at Deloitte and then BakerPlatt (now Baker & Partners) where he immersed himself in regulatory and insolvency work – which ultimately led him to Kroll, a firm which specialises in regulatory due diligence, risk, valuations and compliance.
“A lot of people don’t realise quite how wide-ranging our work is,” Ed reflected. “While we are involved predominantly with regulatory compliance, financial advisory and risk advisory work, our work is of a global nature, and we also provide physical and cyber security advice to high-net-worth individuals, while working with various bodies to carry out investigations and forensics.”
Essentially, says Ed, the Kroll team members are “problem solvers in the financial services industry”.
“From a due diligence perspective, our work involves going into financial services firms and kicking the tyres of the business to assess the firm’s corporate governance, compliance, anti-money-laundering procedures, regulatory posture and relationship with the JFSC,” he explained.
“In many cases, these businesses have international operations, so we will carry out these assessments across all jurisdictions, from Jersey and London to the Asia Pacific, Caribbean, Crown Dependencies and mid-shore. But the pallet of services that we provide is far greater than regulatory due diligence and local and international compliance functions.”
Much of the wide-ranging nature of Kroll’s work comes from its history, with the firm – which is still the largest independent valuations company in the world – having gone through a number of iterations since starting life nearly 100 years ago.
“Before the rebrand to Kroll, the business was called Duff & Phelps, and was founded in Chicago in 1932,” Ed said. “Since then, the firm has gone through various mergers and acquisitions, which have added different strands to the business. Among these are IT companies such as Crisp, which monitors deep web and social media accounts, and Blackrock Expert Services Group, which is an expert witness business.”
Having combined these brands under the Kroll umbrella, the firm’s regulatory and compliance business is complemented by the team’s skills in valuations, investigations – which include producing background reports and research on clients – cyber and data resilience and restructuring.
While the Kroll team in Jersey is relatively small, with seven members, it forms part of the firm’s global network of 34 jurisdictions and 6,500 people.
“We may be small but we punch above our weight,” Ed explained, “and our multijurisdictional presence and specialist knowledge puts us in a strong position to support clients in a world which is increasingly characterised by volatility, uncertainty, complexity and ambiguity. With many clients operating internationally and experiencing cross-border problems, having that global footprint and expertise in particular jurisdictions is important.”
And the increasingly complex and global nature of clients’ businesses is, says Ed, shaping the future of professional services firms.
“The firms that will survive are those with a global footprint across a range of services,” he said. “Kroll specialises in putting together teams of people across the network who fit each client’s problems. If, for example, a fund has got problematic investors or there is a suspicion of fraud, not only does the client need someone with restructuring skills but they might need valuations skills to assess how much their assets are worth.
“If the assets have been misappropriated, they might need someone with cyber skills to work out what’s happened and then they might need someone with investigation skills to follow the money and see where it’s gone. If there has been a cyber problem, there are probably regulatory issues which will also need to be addressed. If data has been stolen, what is the loss? Will clients need to be compensated and how will you manage that claims process?
“This is tremendously specialised work, and this is why you are now seeing advisory firms separate into companies that either offer business-as-usual services or specialist skills on a global basis.”
As the market becomes more “specialised and niche”, Ed says that technology has an increasingly important role to pay.
“The complexity of the market and the cases on which we work means that we rely heavily on people’s expertise, skills and knowledge, so we don’t want them spending time processing payments and doing routine chores,” he said. “This is where technology plays into our strengths, as a lot of the routine tasks are now automated, freeing up time for people to focus on the high-end, value-add services.
“As clients are becoming far more sophisticated, the support from technology becomes ever-more important, but it can also pose challenges, as firms have to work out how to manage each technical development in a safe environment. Critically, in a world of volatility, complexity, uncertainty and ambiguity, we need to position ourselves in a way which enables us to benefit from the technology while having that human overlay to understand how a situation is affecting a client.”
If the assets have been misappropriated, they might need someone with cyber skills to work out what’s happened and then they might need someone with investigation skills to follow the money and see where it’s gone. If there has been a cyber problem, there are probably regulatory issues to be addressed
Ed Shorrock
In another string to Kroll’s bow, the team is also monitoring a firm under the Island’s First Deferred Prosecution Agreement, a scheme launched last year to support businesses which have identified wrongdoing and carried out a remediation exercise.
“In these cases, we work with the Attorney General, the firm and its advisers to monitor and validate the effectiveness of the policies the business has implemented,” Ed explained.
“While relatively new to Jersey, this system is already well used in the US and UK and is another example of Jersey getting its enforcement toolkit up to scratch.”
Further “toolkit enhancements”, he says, will follow the Moneyval inspections, in which Jersey and Guernsey both “performed very well”.
“Some tweaks to the regulatory and legislative systems will be required to accommodate some of the asks from Moneyval but, generally speaking, the Island’s geopolitical forces, transparency and standards of governance mean that it is well positioned to compete on the international stage,” he added.
“However, it is important not to become complacent, as developments such as Pillar 2, the Common Reporting Standard and FATCA mean that the playing field between international finance centres is levelling out.
“That means that Jersey has to compete on quality and service, and the Island remains a premium jurisdiction, showing innovation – through initiatives such as the Jersey Private Fund – and openness, as well as having a well-respected judiciary, which Kroll, through its work with firms in a judicial environment, plays into.
“And that is where I see potential for Jersey as an international finance centre. While the playing field may have become much more level recently, the opportunity to innovate and create bespoke products is still tremendous. Additionally, and this is a piece of work which Jersey Finance has already started, we need to look under the bonnet of the industry and find ways to increase efficiencies and find digital ways to support some of the underlying processes at the JFSC and the registry to enhance and accelerate the client experience.”
