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Finance industry strategy ‘still the right one for us’

Business | Published:

Jersey Finance is planning to set up an office in New York to meet an expected demand for a stable European base for American asset managers and private-equity specialists.

Chief Minister Ian Gorst: States putting more resources into external relations

The move is part of a global review of opportunities for the finance industry, and updates the strategy put in place in 2013 following advice from management consultancy McKinsey & Company.

McKinsey partner Philipp Härle told JFL’s annual review conference last week that the 2013 strategy was still the right one, but it needed to be accelerated in the light of Brexit and the impact of digital industries.

‘Jersey is an extraordinarily successful financial centre,’ Mr Härle said. ‘But the number one priority is now to protect the business you’ve got and the most important aspect of that is the fight for digital talent. The key is to remove barriers for this talent.’

While the conference was told about good growth last year in many areas, two speakers used exactly the same phrase – Jersey cannot afford to rest on its laurels.

The Chief Minister, Senator Ian Gorst, was one of them and pointed out that the finance sector provided 13,270 jobs in 2017, very close to the all-time high of 13,340. The business was flowing in and he was proud of the industry, he said. However, there were many uncertainties to be met if the Island was to ‘continue to be a force for good in this world’.

‘That’s why we are building relationships with developing countries and partner with them so that we can help raise the living standards of the very poorest around the globe through cross-border flows of capital,’ Senator Gorst told the conference.

‘If we are to achieve our ambitions, we must continue to work together to ensure a strong future.

‘But we have an election (this year), and we cannot, and must not, take our economic success for granted when it comes to election time.’

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The Chief Minister said that the government was putting more resources into external relations, and for the first time, the Island had a detailed global strategy of where the government would provide support.

Speaking after the conference, JFL chef executive Geoff Cook said that their strategy might appear as though they were trying to carpet the world, but in fact each market was selected very carefully.

The planned New York office, for example, would initially be exclusively for private-equity opportunities due to European markets becoming more complicated for US investors, as well as uncertain because of Brexit. ‘We can offer a stable route to invest money through Jersey into Europe, as well as raising money from European investors to invest internationally,’ Mr Cook said. ‘We can be their bridgehead and help them operate safely.’

Mr Cook said that although banking had suffered from low interest rates, which had affecting gross value-added, the finance industry was highly successful in delivering tax revenue and jobs, even if some people complained about the dominance of the sector.

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‘I think we provide the wherewithal to make diversification of the economy a realistic aspiration, as we put £400m a year into the government’s coffers,’ he said.

About 83% of those working in finance were local, Mr Cook said, and the aim now was to provide better digital skills so that locals could fill the higher-value jobs.

‘We need better educated, more diverse people who are very comfortable with language and relationship management,’ he said.

‘If automation takes care of those tasks that can be automated, then what’s left? It is the creative side, where we will also need more people.’

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