HEADQUARTERED in Jersey, but with offices in Guernsey and all over the world, the business started in a small office on the Esplanade before moving on to larger premises. In 2017 it returned to the Esplanade with 200+ staff in JTC House and around 650 employees globally.
Last year was a momentous one for JTC because it listed on the London stock exchange and it was, says Nigel Le Quesne, ‘very much a coming of age for the business itself.’
Mr Le Quesne is pleased with their first year’s performance and said he is enjoying being viewed as an ‘overnight sensation’, despite the success having been over 30 years in the making.
‘We’ve grown for at least 29 of those 31 years so we’re used to having a good year,’ he said. ‘From a trading point of view, we’re very comfortable. From the business’s point of view, it was appropriate for us to list at this stage because I think we’d reached a point where we were worthy of being a listed company and the business deserved to be in the spotlight in the way it has been.’
Despite being a global business, Jersey is still the head office and core of the group. The top five or six executives are here and it is where the board meetings are held and the company is registered.
Over the 30 years, the industry itself has changed tremendously, says Mr Le Quesne.
‘It’s gone from being a local industry, where you’d pick your provider in one jurisdiction, to obviously having businesses that are multi-jurisdictional. Over time, and before we actually even started acquiring businesses, we started to open offices in other localities. It was really important to a lot of clients to have consistency of delivery,’ he explained.
Mr Le Quesne also thinks that although the industry has gone through a period of consolidation, there is more to come.
‘In Jersey specifically, I don’t think there’s that much left to consolidate but, generally speaking, there are jurisdictions out there where all the big businesses will be suboptimal for whatever reason, either wrong team or wrong size for the jurisdiction or for the opportunity that presents itself, so we’re not too concerned that we won’t find things to go after in the future,’ he said. ‘What I should say, however, is we never just make acquisitions and expect our underlying business to flat line, it always has to grow every year.’
He believes that Jersey’s excellent regulatory reputation stands it in good stead, but some of the other jurisdictions they are in could see problems ahead.
‘I think clearly if substance becomes the expectation from the overseas territories it’s unrealistic,’ he explained. ‘There are tens of thousands of companies (registered but not economically active) in the BVI. And I don’t think it’s got the infrastructure. You can’t have substance and be in the BVI, it’s a different sell. So I don’t know how it will play out for the jurisdiction.
‘But that’s not going to unravel overnight. There’s a job to be done, even if people are going to re-domicile. So in that regard, they’re still in reasonable shape, even if it’s a book that will weaken over a period of time.’
JTC also has an office in Luxembourg which Mr Le Quesne sees as a good hedge for Brexit, as he thinks businesses like theirs without an office in either Luxembourg or Ireland, might have some concerns.
Luxembourg has been a potential competitor for the Channel Islands for 15 years, but Mr Le Quesne is confident that there is room for both jurisdictions.
‘We’re seeing some of the big consolidators now come out of Luxembourg because they’re sitting in the right place. My view is, it always has been a threat to Jersey but I think Jersey will find its place in the new world,’ he added.
Having said that, JTC opened in Luxembourg in response to its clients’ needs.
‘I’m a very proud Jersey man, and proud to be based here,’ he continued, ‘but I don’t think just Jersey anymore because I can’t afford to.’
He puts their success down to 30 years of consistent management and a consistent approach that has built a culture in the business based on the principle that everyone owns a part of it. He created the JTC Employee Benefit Trust, turning employees into stakeholders in 1998. In 2014, this was extended further with all permanent members of staff being able to invest in the future of the company through the Equity for All scheme.
‘I’ve always felt that sharing the rewards from a capital perspective is a really important aspect. Because everyone’s an owner, I never feel guilty that we’re all working long hours and so on, and it has a self-policing element to it as well. You don’t have the group in the corner who might spend their day otherwise engaged in watching the clock tick by.
‘We have created over £200 million of value from a capital perspective for our employee owners, but I think it’s much more than that. I think there’s a bond. It’s very difficult to put into words, where our branding does a bit of a job saying that, as butterflies we’re all flimsy and weak, beautiful in our own way; but if we work together we can be like a lion or an elephant. Fundamentally, that’s what drives me every day. I feel like I’m just another one of the butterflies, the one who’s been around the longest, the one who has probably carried a larger burden over a 28-year period, but nevertheless, I’m just another one. So I’ve always felt like an employee of a far greater thing, which is JTC itself.’
The shared ownership isn’t the only ‘core value’ of JTC which has helped it to maintain an entrepreneurial spirit despite its age and size.
Mr Le Quesne says there is a phrase in the company – ‘the JTC way’ – and it is built around a set of values. Shared ownership is at the heart, but meritocracy – it doesn’t matter where you started, it’s where you end up – is another.
‘I honestly believe you can have a job for life at JTC so everybody who joins goes on a journey,’ he said. ‘Maximising individual potential is another one of those guiding principles. So if we ever spot somebody standing on someone else’s head, because it suits them in the context of their own career, or because it makes them look better, that’s an absolute no-no at JTC. ‘And then the other side of the guiding principles is our entrepreneurial outlook, the want to win mentality of sports teams. We can be quite tough with each other behind closed doors, but when you’re out in the market, you stick up for your colleagues and so on.’
The consistency with which Mr Le Quesne has managed these principles and the business, is the reason it has become embedded in the culture. He came to JTC from a partnership (he wasn’t a partner himself), where he learnt a lot about how not to do it.
‘I almost completely turned it on its head and said, it’s not two or three people who are going to be an owner, everyone’s going to be owner. It’s not these are my clients, they are the firm’s clients. So this JTC journey has been as much to do with what you can achieve when you put a lot of well motivated, focused individuals together, just by organising yourself in a different way,’ he explained
This ethos means staff are only taken on if they are aligned to the culture and values. Once in the business, they tend to be either fiercely protective of it or, if they don’t fit, are asked to leave. It prevents infighting.
With many of the relationships at JTC long-term, Mr Le Quesne believes that although landing the business is tough, just incentivising the sale or ‘finder’ means the relationship manager or ‘minders’, who might have that client for years and can grow it, don’t get rewarded. For that reason everyone, including their finders, are paid good flat salaries, rather than relying on bonus incentives.
‘We flirted with sales hockey-stick-type incentives for new business, which I’ve never been a fan of. I let the business experiment with that for a couple of years, and then said, “there you go, it drives the wrong behaviours”.’
It’s all about trying to breed long-term, rather than short-term success, and appears to be working. Looking forward, Mr Le Quesne wants to carry on with a similar approach.
‘You can’t rest on your laurels, so it’s about constantly improving your services and improving the quality of your team, which the JTC Academy helps us with. You have to understand what your clients actually want, rather than what you think you want to sell them. Honestly, it’s so true of financial services, people get sold what someone somewhere in a dusty office suggested that they’re going to want rather than what they actually need, I start with what you actually need,’ he stressed.
‘I think there will be a couple of acquisitions. I think what we’re trying to let the market know is consistent results. If you drew a line of JTC results over those 30 years, it’s a straight line. So we want the market to understand that if we say we’re going to do something, generally speaking, we do it. I think the size of acquisitions might get a little bigger, and I think there will be more consolidation in the market as a whole. In the end, I think we’ll end up with eight or ten big consolidators in the market, of which I hope JTC is one.’
That’s not to say that Mr Le Quesne doesn’t think there are opportunities for new incumbents.
‘If I was starting my career again, I’d see that as an opportunity to start a really good niche practice in a place that I know,’ he said. ‘I’m desperate for us not to become that big organisation that’s too arrogant for its own good. We have a responsibility to our staff, because they’re all owners. I feel like they might think they work for me but I feel like I work for them as well as, of course, the institutions that we’ve now got.’
Looking at the Channel Islands, and Jersey in particular, Mr Le Quesne sees some other non-Brexit challenges ahead.
With new heads at both Jersey Finance and the Jersey Financial Services Commission, after years of consistency, he said he was keen that the new incumbents of those roles continued to work well together with the new government, adding that the previous government team deserves a lot of credit for what they did.
One thing that does concern Mr Le Quesne about the Channel Islands is the danger of complacency.
‘I think you get to expect to have a salary every year, you get to expect to go home at five o’clock, you get to expect to have a package that, frankly, if we were in the Midlands, we wouldn’t have. And sometimes I think we forget how lucky we are to have had the industry build up here.’
He talks about the energetic fizz in their South African office where the staff are keen and ‘hungry’ yet, like most things, Mr Le Quesne isn’t just asking for that energy from his staff.
‘I should get better at my job every year. I’ve had a little bit of “how much longer are you going to do it?” It doesn’t even occur to me. When I am no longer of any use, or at least at an appropriate moment of that balance between making sure the culture is embedded, one day I’ll shuffle off. But the reality is, I never look at a bank account and think I’ve got enough to stop doing that. Why not make your job one of the most exciting things about your life? Why come in and only half do a job? I don’t get it.’
This interview appears in the April issue of Business Brief. You can sign up to receive a copy of the Channel Island’s business magazine in your inbox at http://bit.ly/BBriefSignup.
